The E85 Myth:

WickedLou9 · 09-26-2006, 10:59 AM

I have a subscription to Consumer Reports and I figured you guys would like this article.

Some of the stuff is obvious, some is not.

The Bush administration has been pushing ethanol as a renewable, homegrown alternative to gasoline. Now, the auto industry is abuzz with the promise of its flexible-fuel vehicles (FFVs), which are designed to run on either gasoline or the blend of 85 percent ethanol and 15 percent gasoline called E85.
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A recent Harris Interactive study of vehicle owners found that more than half were interested in purchasing an FFV, mostly for reduced dependency on petroleum and improved fuel economy.

But after putting a 2007 Chevrolet Tahoe FFV through an array of fuel economy, acceleration, and emissions tests, and interviewing more than 50 experts on ethanol fuel, CR determined that E85 will cost consumers more money than gasoline and that there are concerns about whether the government’s support of FFVs is really helping the U.S. achieve energy independence. Among our findings:

The fuel economy of the Tahoe dropped 27 percent when running on E85 compared with gasoline, from an already low 14 mpg overall to 10 mpg (rounded to the nearest mpg). This is the lowest fuel mileage we’ve gotten from any vehicle in recent years.

With the retail pump price of E85 averaging $2.91 per gallon in August, according to the Oil Price Information Service, which tracks petroleum and other fuel prices, a 27 percent fuel-economy penalty means drivers would have paid an average of $3.99 for the energy equivalent of a gallon of gasoline.

When we calculated the Tahoe’s driving range, we found that it decreased to about 300 miles on a full tank of E85 compared with about 440 on gasoline. So you have to fill up more often with E85.

The majority of FFVs are large vehicles like the Tahoe that get relatively poor fuel economy even on gasoline. So they will cost you a lot at the pump, no matter which fuel you use.

Because E85 is primarily sold in the upper Midwest, most drivers in the country have no access to the fuel, even if they want it. For our Tahoe test, for example, we had to blend our own (see The great E85 fuel hunt).

The FFV surge is being motivated by generous fuel-economy credits that auto-makers get for every FFV they build, even if it never runs on E85. This allows them to pump out more gas-guzzling large SUVs and pickups, which is resulting in the consumption of many times more gallons of gasoline than E85 now replaces.

The problem with FFVs

Currently, there’s no financial advantage to consumers in buying an FFV. Even if gas prices continue to rise, E85 may not become more financially appealing. Because it’s a gas replacement, “if the price of oil goes up, you would expect the price of ethanol to go up as well,” says Craig Pirrong, director of the University of Houston’s Global Energy Management Institute.

On the other hand, there’s no inherent downside to buying FFVs, because they can run on gasoline and don’t carry the hefty price premiums of a hybrid. Your choice, however, is limited mostly to large SUVs, pickups, and sedans that get relatively poor gas mileage. And most are currently not on Consumer Reports’ list of recommended vehicles, primarily because of below-average reliability, according to our subscriber surveys, or because they’re too new for us to have reliability data.

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Moreover, of the 4.8 billion gallons of ethanol that are expected to be produced this year, only about 1 percent, or 48 million gallons, will go toward blending E85, according to the UCS. Because our tests show that E85 provides 27 percent lower fuel economy, those 48 million gallons are able to replace only a little more than 35 million gallons of gasoline--a fraction of the extra gas for which the FFV credits are responsible.
In short, the credits are causing more gas to be burned rather than less. Here’s why: The credit was passed as part of the Alternative Motor Fuels Act of 1988 and counts toward a manufacturer’s Corporate Average Fuel Economy (CAFE) standard, which is set by National Highway Traffic Safety Administration. Under the regulations, the average fuel economy for an automaker’s entire fleet of vehicles must meet a minimum miles-per-gallon figure: 27.5 for cars and 21.6 for 2006 light trucks. So the more large vehicles a manufacturer builds with gas mileage below that minimum, the more they have to be offset either by smaller vehicles that get better fuel economy or by fuel-economy credits.

In determining the credit, the government assumes that an FFV will run on E85 half the time and on gasoline the other half. For CAFE purposes, the E85 half is calculated as using only the 15 percent that is gasoline. So the government rates FFVs at about 1 2/3 times the fuel economy that they actually get on gasoline, even though the vast majority may never be run on E85 at all. A two-wheel-drive version of our 2007 Tahoe, for example, would normally be rated for CAFE purposes at 21 mpg. But because it’s built to run on E85, it’s rated at 35 mpg instead.

In addition to allowing automakers to build more large, high-profit SUVs and trucks, FFV credits can help them avoid fines that can be imposed for not meeting the CAFE standard. The Union of Concerned Scientists estimates that through mid-2005, FFV credits saved Detroit automakers more than $1.6 billion in CAFE fines. Automakers may consider this a good trade-off, because FFVs cost them less than $200 more to build than a conventional version. The maximum that an automaker’s fleet average can be raised because of FFV credits is 1.2 mpg.

There were a few more sections but this is the meat of it.

DosEquis · 09-26-2006, 11:13 AM

The last time I ran it in my GMC Sierra pickup I averaged 13.5 mpg and paid 40 cents per gallon less than regular 87. With regular gas I average between 14.5 and 15.5 mpg. The 07 tahoe probably has a slightly different engine than i have, but they are still both the 5.3 V8.

The only time it starts to become beneficial to buy it, from my experience, has been when gas approaches $3 a gallon.

WickedLou9 · 09-26-2006, 11:23 AM

Originally Posted by DosEquis

The last time I ran it in my GMC Sierra pickup I averaged 13.5 mpg and paid 40 cents per gallon less than regular 87. With regular gas I average between 14.5 and 15.5 mpg. The 07 tahoe probably has a slightly different engine than i have, but they are still both the 5.3 V8.

The only time it starts to become beneficial to buy it, from my experience, has been when gas approaches $3 a gallon.

My real problem is the loophole that it provides to auto manufacturers.. whereas they can disregard the fuel efficiency standards set by the government if they build so many FFV's.. which are essentialy the same as any other car except for the fact that the CPU has a second air/fuel mapping for E85. That and the fact that we could never produce enough ethanol to replace gasoline. It doesn't really solve anything.

6SpeedTA95 · 09-26-2006, 11:31 AM

Originally Posted by WickedLou9

My real problem is the loophole that it provides to auto manufacturers.. whereas they can disregard the fuel efficiency standards set by the government if they build so many FFV's.. which are essentialy the same as any other car except for the fact that the CPU has a second air/fuel mapping for E85. That and the fact that we could never produce enough ethanol to replace gasoline. It doesn't really solve anything.

Ethanol is a good supplement and continuing to develop it is a good plan. It used to take 3 gallons of oil to get a gallon of gasoline, now that ratio is one to one thanks to technology and refining advances. Just dropping all R&D and ethanol options because "we can't produce enough of it" is bogus IMO. If you can supplement just 25% of our gasoline usage with ethanol then I'd say between that, hybrid technology, perhaps hydrogen and improved fuel effeciency that we'd see a fair amount demand relief when it comes to gasoline. Pursuing these options is the smart thing to do, dropping it by the wayside means we'll never see any progress.

NOTHING generates the energy required as cheap, clean and effeciently as gasoline right now. That will change only if we spend the time to research the issue.

DosEquis · 09-26-2006, 11:46 AM

Originally Posted by WickedLou9

My real problem is the loophole that it provides to auto manufacturers.. whereas they can disregard the fuel efficiency standards set by the government if they build so many FFV's.. which are essentialy the same as any other car except for the fact that the CPU has a second air/fuel mapping for E85. That and the fact that we could never produce enough ethanol to replace gasoline. It doesn't really solve anything.

I agree with you in the parts where it is basically corporate welfare. They can put a chip on there to alter the air fuel mapping, for probably less than $200 bucks. They can charge more for the vehicle and they also get the tax credit.

WickedLou9 · 09-26-2006, 11:49 AM

Originally Posted by 6SpeedTA95

Ethanol is a good supplement and continuing to develop it is a good plan. It used to take 3 gallons of oil to get a gallon of gasoline, now that ratio is one to one thanks to technology and refining advances. Just dropping all R&D and ethanol options because "we can't produce enough of it" is bogus IMO. If you can supplement just 25% of our gasoline usage with ethanol then I'd say between that, hybrid technology, perhaps hydrogen and improved fuel effeciency that we'd see a fair amount demand relief when it comes to gasoline. Pursuing these options is the smart thing to do, dropping it by the wayside means we'll never see any progress.

NOTHING generates the energy required as cheap, clean and effeciently as gasoline right now. That will change only if we spend the time to research the issue.

I still think that the way the government went about this is wrong. They should have simply mandated that all vehicles be able to run on E85 by Such and such a date. Allowing them credits for producing FFV vehicles is counter productive because most of the trucks they are making today will never run on E85.. and making them allows The manufacturer to sidestep fuel efficiency standards. So rather than making more efficient vehicles, the incentive to make more efficient cars and trucks has been removed. Making an engine run on E85 is easy. The cost is minimal. The cost of researching and building more efficient engines is not. So with the added incentive removed...?

Stylerod · 09-26-2006, 11:53 AM

My dad told me about this last week. If the car companies would make every car work with either fuel maybe that would create demand and ethonol production would increase. The story my dad read told how many stations offer the E85 fuel and I think he said there was 1 in all of NC.

6SpeedTA95 · 09-26-2006, 11:56 AM

Originally Posted by WickedLou9

I still think that the way the government went about this is wrong. They should have simply mandated that all vehicles be able to run on E85 by Such and such a date. Allowing them credits for producing FFV vehicles is counter productive because most of the trucks they are making today will never run on E85.. and making them allows The manufacturer to sidestep fuel efficiency standards. So rather than making more efficient vehicles, the incentive to make more efficient cars and trucks has been removed. Making an engine run on E85 is easy. The cost is minimal. The cost of researching and building more efficient engines is not. So with the added incentive removed...?

I dont have a problem with it, because as you know I have a problem with corporate income taxes. So finding ways to cut those taxes is ok with me.

Having said that, I agree there are definately better ways they could have and should have gone about this.

WickedLou9 · 09-26-2006, 12:10 PM

Originally Posted by Stylerod

My dad told me about this last week. If the car companies would make every car work with either fuel maybe that would create demand and ethonol production would increase. The story my dad read told how many stations offer the E85 fuel and I think he said there was 1 in all of NC.

I don't think it would generate demand unless it was cheaper. People think with thier wallets. E85 has to be more than 15% cheaper than gas for it to be worth buying.. since E85 is not a dense of a fuel source you will get worse milage and have to fill up more. realisicaly the E85 would have to be 20%-25% cheaper before anyone would really buy it.

WickedLou9 · 09-26-2006, 12:12 PM

Originally Posted by 6SpeedTA95

I dont have a problem with it, because as you know I have a problem with corporate income taxes. So finding ways to cut those taxes is ok with me.

Having said that, I agree there are definately better ways they could have and should have gone about this.

It's not really taxes.. it's the government saying that all vehicles should get X mpg. BUt if you make an FFV, the car that gets 20MPG will be rated at 35mpg? So really they didn't mandate anything since making a vehicle a FFV is as easy as changing the fuel mapping and making sure that the fuel pump can handle the added flow and that the sensors are correct.. mechanicaly the engine is the same.

6SpeedTA95 · 09-26-2006, 12:18 PM

Originally Posted by WickedLou9

It's not really taxes.. it's the government saying that all vehicles should get X mpg. BUt if you make an FFV, the car that gets 20MPG will be rated at 35mpg? So really they didn't mandate anything since making a vehicle a FFV is as easy as changing the fuel mapping and making sure that the fuel pump can handle the added flow and that the sensors are correct.. mechanicaly the engine is the same.

Yes I know the engine is the same. They change some hoses, a pump and a map thats really it. The majority of ICE's can run on E85 with no internal changes.

Companies are required to meet specific requirements and are getting tax incentives for E85 vehicles. I'm ok with that, I dont necessarily think its the best approach but I'm ok with it.

Using it to bump companies Fuel Economy numbers is ridiculous though.

WickedLou9 · 09-26-2006, 12:33 PM

Originally Posted by 6SpeedTA95

Yes I know the engine is the same. They change some hoses, a pump and a map thats really it. The majority of ICE's can run on E85 with no internal changes.

Companies are required to meet specific requirements and are getting tax incentives for E85 vehicles. I'm ok with that, I dont necessarily think its the best approach but I'm ok with it.

Using it to bump companies Fuel Economy numbers is ridiculous though.

I would rather the E85 compliance be mandated and the incentives given to the producers of Ethanol.

6SpeedTA95 · 09-26-2006, 03:40 PM

Originally Posted by WickedLou9

I would rather the E85 compliance be mandated and the incentives given to the producers of Ethanol.

I think thats a fair point.

Diesel66 · 09-26-2006, 05:52 PM

Even the groups pushing for ethenol admit that corn alcohol has only slightly more energy then it takes to make (other groups show you losing energy). Sugar cane on the other hand has nearly 4 times the level of energy required to make it and the wild grass is something like 10 times the level of corn and takes less water to grow.

Problem with all of them is the American farmlands dont have enough space to feed us and provide us with fuel. The only way they will work as a viable fuel source is if we have most cars switched to plug in hybrids with a clean cheap source of electricity.

Hopefully the new solar projects provide cheap clean power that can be put on all houses/buildings.