General Motors Leads Biofuel Charge In The US

Online, February 2, 2011 (Newswire.com) - The US automotive giant General Motors has adopted a broadly three-pronged strategy to the development of alternative fuel vehicles. In the longer term it plans to ramp up production of electronic vehicles such as its Chevrolet Volt hybrid electric car that was launched last year. It is also conducting intense research and development on fuel cell-powered vehicles.

However, in the short term its main commercial focus is on the manufacture and roll-out of flexfuel vehicles capable of running on biofuel - specifically, on E85, a blend of 85% ethanol and 15% gasoline. During an on-stage interview at last week's Global Biofuels Summit in Barcelona, Clean energy pipeline editor Ronan Murphy spoke to Dr. Candace Wheeler, Technical Fellow and Biofuels Lead at General Motors, to learn more about the company's flexfuel strategy.

Wheeler said that the reason GM is leading the charge for E85 is that it represents the fastest solution to bringing low-carbon vehicles on to the market in bulk. "Flexfuel can have an impact today," she said. "It is relatively cost-effective. We haven't publicly announced how much it costs per vehicle but people have estimated it at around $150, though it does depend on the vehicle." GM will have 19 flexfuel models in production during 2011 and has committed to making half its new portfolio E85-compatible in 2012, a goal that Wheeler said the company is on target to achieve.

The main barrier to the growth of flexfuel vehicles does not come from vehicle manufacturers. As Wheeler pointed out, both Ford and Chrysler have also committed to 50% flexfuel vehicles in their new portfolios by 2012, and the major domestic US manufacturers made 28 flexfuel models available to consumers in 2010. Nor is there an issue with ethanol supply. The primary problem is the lack of pumps and gas stations that sell E85 blends. "In the United States we have about 125,000 fuelling stations and only 2,500 of those are E85 compatible," said Wheeler. "So, 90% of the people who own a flexfuel vehicle don't have a pump in their zip-code. 50% don't have one in their county."

Wheeler believes that one factor behind the slow growth of E85 pumps is a ponderous certification process to clear components for public use. The certification for the hoses came through last autumn, and she hopes this will expedite a wider roll-out. Another major requirement is support from state and federal entities, particularly in bridging the gap between ethanol prices and unleaded gasoline. She put forward the example of Denver, Colorado, as one model for stimulating the expansion of E85 pumps.

"In Denver there is a microcosm of the situation in that the fuel is somewhat subsidised by the state of Colorado and there are 54 stations just in the Denver area itself," she said. "When you think about the 2,500 stations across the US, that is a very large concentration. Part of it is that the price difference between unleaded and E85 was so significant that people were flocking to the stations and saying 'I normally buy gas here on my way home but the station has E85 down the street and I want E85 for my vehicle, so it was a competitive position for more and more of the station owners to put in the pump."

Wheeler is confident that the Department of Energy ("DOE") and the Department of Agriculture ("USDA") will make more funding available. "I think with the support of the government and with final UL certification, and if we can get the price of ethanol cost-competitive on a BtU (British thermal unit) basis, we will see the development of the infrastructure", she said.

There is added urgency to increasing E85 fuel availability due to fears that the US ethanol market has hit "the blend wall", the point at which it is producing more ethanol than can be physically placed into blends. Just this month, the US Environmental Protection Agency (EPA) approved the use of E15, a 15%-85% ethanol blend, for use in vehicles manufactured between 2001 and 2006.

"It is a real problem," said Wheeler. "In the US we are currently using 135-136 billion gallons of gasoline per year. If we take 10% of that as our E10 limit that is around 13 and a half billion gallons for this year. With the Renewable Fuel Standard we will hit that limit. The E15 approval only buys us a little bit of time and then we're back at that blend wall. General Motors' position is that we need to get flexfuel out there so we can use the 85% blend and suck up all that extra ethanol.