Elevated gas prices and growing interest in higher blends of ethanol could make
2008 a banner year for E85.
"We believe the planets are aligning to encourage a very rapid expansion of E85,” says Bob Dineen, president of the Renewable Fuels Association (RFA).
Although E85 still represents a fraction of the overall ethanol market, RFA estimates a record 150 million gallons were sold last year—approximately the same consumption as in the fast-growing biodiesel market. There are now more than six million flexible-fuel vehicles (FFVs) on the road and more than 1,500 E85 refueling stations.
In October 2007, Underwriters Laboratory approved a test protocol for E85 refueling pumps, paving the way for a dramatic expansion of the E85 refueling infrastructure. In December, a little noticed provision of the energy bill strengthened the Petroleum Marketers Practices Act, making it illegal for refiners to discourage gasoline marketers from selling E85.
But in order for the E85 market to really grow, there must be more vehicles capable of using the fuel, says Bill Honnef, VeraSun Energy Corporation senior vice president of strategic initiatives. "Every vehicle we build today that is not an FFV we will have to live with for 17 years until that vehicle is retired,” he says.
Driving demand. The auto industry does seem to be listening to demand for FFVs. This year, 31 models of motor vehicles will be offered with an E85 capable engine, according to the National Ethanol
Vehicle Commission (NEVC).
"From a humble beginning of less than 500 FFVs in 1993, we expect that more than 750,000 such FFVs will be produced in the coming year,” says NEVC executive director Phil Lampert. General Motors (GM), Ford and Chrysler have pledged to make 50% of all their new vehicles FFVs by 2012.
"We are working on developing flex-fuel vehicles as fast as we can,” says Mary Beth Stanek, GM director of environment and energy. GM even plans to green up its dirt-loving Hummer brand starting with the 2009 H2 and H2 SUT, which will become its first flex-fuel models.
The automaker is also pushing hard to get E85 infrastructure available, Stanek says. In conjunction with
VeraSun, GM has ushered in 300 E85 stations.
Going hand in hand with increasing FFVs is increasing E85 availability at the pump. One of the biggest challenges the 85% ethanol fuel has faced is oil company reluctance to allow the fuel at franchise stations.
The new energy bill should help with this problem, according to the American Coalition for Ethanol.
Under the new law, no franchise agreement can limit the sale of E85. This means that the franchisor cannot restrict a franchisee from installing a renewable pump, from converting an existing tank or pump to E85 or from advertising the sale of renewable fuels.
The energy bill also provides retailers incentives to convert existing equipment or purchase and install new infrastructure to dispense E85. In addition, a new $200 million program to install blender pumps is also authorized through the energy bill.