To E or not to E

The debate over E85


September 12, 2006


Vehicles running on E85, a fuel that blends traditional gasoline with ethanol, are receiving considerable attention. While proponents claim the benefits of E85 range from environmental friendliness to improved national security, critics argue that the widespread adoption of E85 will be a tremendous challenge.

E-85 graphic

Vehicles running on E85, a fuel that blends traditional gasoline with ethanol, are receiving considerable attention. The Big Three are heavily marketing these cars to the public, and they even took them to Washington, D.C., to show them off to Congress. While proponents claim the benefits of E85 range from environmental friendliness to improved national security, critics argue that the widespread adoption of E85 will be a tremendous challenge.

Spotlight on Ethanol

E85, which is 85 percent ethanol and 15 percent gasoline, is not new. The Big Three have been building E85-capable vehicles for years.

Vehicles that run on E85 also can run on pure gasoline. The difference between E85-capable cars and those that run on traditional gasoline is small. Ethanol is corrosive to fuel lines and hoses normally used in engines. By using special lines and hoses resistant to this corrosion, an ordinary engine can run both E85 and regular gasoline.

While the Big Three have made these flex-fuel vehicles for years, they have not called attention to them in a significant way until recently. E85 vehicles were built primarily to take advantage of Corporate Average Fuel Economy (CAFE) standards that offer benefits for producing vehicles that can use environmentally friendly fuels. Even if most of the consumers who bought these vehicles never used their flex-fuel capability, the automakers still received a CAFE benefit.

Now that oil has surpassed $70 per barrel and gasoline is more than $3 per gallon, the Big Three are touting their E85 capabilities. Because the U.S. is trying to reduce its dependence on foreign oil, and each gallon of E85 contains only 15 percent gasoline, its use can make a significant difference.

The U.S. automotive industry needs to strengthen its link to Washington, and E85's benefits to U.S. national security may be the way to do it. As the automotive industry employs fewer Americans and is increasingly dominated by automakers and suppliers from abroad, its influence over both U.S. political parties is waning. Linking E85 to national security that E85 provides could be a way for Detroit to regain the ears of Congress.

The Big Three are touting their flex-fuel capability to counter perceptions that they have been outpaced by Asian hybrid vehicles. While the Big Three are starting to launch their own hybrid offerings, they're hitting the market years after Toyota and Honda began offering similar products. At the same time, the hybrids Detroit is launching have not garnered the attention of the Toyota Prius®, the poster child for automotive environmental responsibility. Flex-fuel vehicles show the Big Three's commitment and capability to launch their own environmentally friendly vehicles.

The Proponents' View

Supporters of E85 point to its environmental benefits. It replaces the use of petroleum, which is not renewable, with corn or sugar cane. Cars running on E85 emit less pollution than those running on pure gasoline.

E85 can potentially reduce U.S. dependence on foreign oil. Cars don't need much modification to run on E85. Compared with the price of a hybrid, which adds about $3,000 to the cost of a standard car, modifying a vehicle for flex-fuel capability looks like a bargain.

E85 proponents often point to Brazil, where all new vehicles sold run on ethanol produced from sugar cane. If Brazil can adopt 100 percent ethanol, the argument is that the U.S. should be able to make the switch to a fuel that uses 85 percent without too much trouble.

The Obstacles to Wider Adoption

Several factors are making it difficult to adopt E85 on a wide-scale basis.

E85 can't be transported in the same pipelines used for gasoline. It must therefore always be shipped by truck. This adds to the cost of producing E85, which currently averages $4 per gallon. With gasoline hovering at about $3 per gal., E85 is not price-competitive without government subsidies.

To be truly price-competitive, E85 must cost less per gallon than gasoline, because it produces less energy per gallon than gasoline. A car running on E85 travels approximately 20 percent fewer miles per gallon than one running on gasoline. To travel the same distance, a consumer needs to buy more gallons of E85.

E85 Alternatives

E85 is not the only way to achieve greater environmental friendliness and less dependence on foreign oil. Hybrids, future fuel cell-powered cars, hydrogen combustion engines, and clean diesels all are potential alternatives. Each has its downsides, however, and none can be brought to market as fast as an E85-capable vehicle lineup.

Perhaps the best alternative is E10—a fuel blend that consists of 10 percent ethanol and 90 percent gasoline. Nearly all vehicles on the market are capable of running E10 with no modifications. If E10 were to replace all gasoline in the U.S., the benefits of reducing all vehicles' gasoline consumption by 10 percent would have a much greater effect than switching a small percentage of new vehicles to E85. This approach is widely argued as the most sensible, and Japan soon may adopt it.

The Outlook

Personal transportation is rapidly going to become friendlier to the environment and consume less nonrenewable resources. Many technologies are vying to become the means by which these goals will be achieved. E85 appears to be well-positioned to fuel our cars until they are no longer powered by internal combustion engines.

Center for Automotive Research

Bernard Swiecki

Contributing Writer
Center for Automotive Research
1000 Victors Way
Suite 200
Ann Arbor, MI 48108
Phone: 734-929-0484
The Center for Automotive Research focuses on the future of the international automotive industry. Its overall objectives are to provide industry research and analysis, communication forums, and informational resources that respond to the changing needs of the international automotive and automotive-related industries.

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