E85 Boondoggle of the Day: Automakers Kinda Heart E20

More than a year ago, the ethanol industry hit the “blend wall”: the difference between what they could produce and what the market wanted to use. This despite billions in tax credits: direct and indirect federal and state subsidies. All enabled by a federal mandate mandating that the ethanol boys brew nine billion gallons of renewable fuels in 2008, rising to 36 billion by 2022. And then the gas price bubble burst and environmental impact studies arrived, revealing corn-for-fuel as a carbon positive endeavor. The ethanol industry pretty much curled-up into the fetal position. The small players went belly-up. The big boys—including Archer Daniel Midlands (whose corporate jet ferried candidate Obama around the Midwest)—put their hopes into E20.

By doubling the federally-required amount of ethanol in gas, well, voi damn la! Only the blend may damage ICE-equipped transportation. Nothing a few bought and paid for dubious studies can’t cure, right? How do I know that one was dubious? Check out this comment on the Minnesota study:

I work on Biofuels Implementation for GM Powertrain and am very interested in these studies. GM is constantly supporting the production and distribution of ethanol and we feel it’s the best solution for our energy needs right now, but we do need to make sure E20 has been thoroughly tested. More long-term testing is still needed to measure things like driveability, tailpipe emissions and emissions control systems. The Minnesota studies only tested the cars for 3000 hours, which is a lot less than what an OEM requires. I encourage them to keep testing and keep learning more about ethanol.

I wrote a blog for GMnext.com addressing these issues. You can check it out here: http://blog.gmnext.com/?p=93 [ED: I can’t find the post in question.]

Coleman Jones

Anyway, them’s your battle lines. So upon which side of the fence do the automakers’ reside. Yes! More taxpayer-funded testing yes! [see: above] Here’s the letter from the the Alliance of Automobile Manufacturers and the Association of International Automobile Manufacturers:

September 25, 2009

To: Conferees on the Energy and Water Appropriations Bill, H.R. 3183

The Alliance of Automobile Manufacturers and the Association of International Automobile Manufacturers write to request that you direct the Department of Energy (DOE) to prioritize its spending so that it may complete some very important testing with ethanol fuels, as explained below.

Automakers support the broader use of alternative fuels in order to reduce greenhouse gas emissions and increase energy security, and we believe the best way to do so is through the use of diverse fuels and technologies. Currently, more than 12 million alternative fuel automobiles are on our roads and highways, including more than 7 million flexible fuel vehicles capable of using blends of up to 85 percent ethanol. We remain committed to finding the right market solutions for sustainable biofuel use.

The Environmental Protection Agency (EPA) is now considering a request to allow more than the current limit of 10% ethanol in gasoline, to further increase ethanol consumption. We believe any proposal to raise ethanol levels before adequate data are available is premature, and since EPA has never allowed conventional vehicles to use higher ethanol blends, the research on their potential impacts on vehicles not designed, tested or warranted for their use is incomplete.

To assure the research is adequate and of sufficient quality, automakers have joined with several other stakeholders to create the “Mid-Level Ethanol Blends Research Coordination Group” (Research Coordination Group). Participants include experts from the auto[1], oil, ethanol, small engine, marine, outdoor power equipment and motorcycle industries, along with experts from DOE and EPA. The group is using EPA recommendations to assess numerous test plans.

The Research Coordination Group has now identified critical information gaps, as well as research overlaps, opportunities for collaboration and funding needs. The Group estimates that $17 million beyond existing allocations will be needed to successfully complete vehicle studies that will provide much needed data for evaluating the effects of adding more ethanol to base fuels. This analysis is the basis for our request, namely, that the Conference Report:

* Direct DOE to spend up to $17M in 2010 to complete the necessary vehicle testing to evaluate the effects of mid-level ethanol blends on legacy vehicles; and

* Direct DOE to reprioritize its 2010 Program Spending to provide this $17M to complete the test program.

With the completion of a well-designed and executed test program, EPA and others would be much better able to determine whether the current 10% ethanol limit can be safely increased.

Thank you for your consideration. We look forward to further discussion with you about, and your support on, this very important issue.

Dave McCurdy Michael Stanton, President & CEO President & CEO

Alliance of Automobile Manufacturers Association of International Automobile Manufacturers

Charles Territo, Senior Director of Communications, Alliance of Automobile Manufacturers

1401 Eye St., NW Suite 900

Washington, DC 20005

202-326-5523

twitter: @charleyterrito