Ethanol and CAFÉ standards – Money for Nothing

“That ain’t workin’, that’s the way you do it, money for nothing…”
- Dire Straits
As a consumer, you should know that the latest attempt by the government to legislate better gas mileage offers you very little in the way of benefits.

That felt like a gator. Maybe we should drain the swamp.

The original intention of the Alternative Motor Fuels Act of 1988 was to lessen our dependence on foreign oil. As part of the act, congress, in its infinite wisdom, set up fuel-economy credits for each FFV (flex fuel vehicle) produced. The auto companies seized the opportunity by bolstering the fuel economy of their most inefficient and profitable vehicles – large sport utilities. In the process, automakers were not only able to put more of these gas-guzzlers on the road, they dodged millions in CAFÉ related fines.

I’m from the government and I’m here to help you.

This is how it works. If you want to produce a vehicle that only runs on ethanol, you need to re-engineer the engine. Ethanol has a much lower BTU rating than gasoline, so the engine compression has to be increased to the point where burning it becomes as efficient as gasoline. Since using gasoline would cause this type of engine to melt, this baby is a one trick pony. Although, under the federal rules, the effective fuel economy would double versus its gas-only counterpart, the required changes would not be cost-effective.

Plan B – flex fuel – only requires an additional $200 per vehicle. Changes such as fuel lines and different engine management programming result in a flex fuel vehicle that, chances are, will never burn E85 ethanol (85% ethanol, 15% gasoline). But these changes will boost the average fuel economy of a Chevrolet Tahoe by about 1 2/3 times its actual fuel economy, based on the government formula for biofuel vehicles. This has the added benefit of raising the vehicle model’s corporate average fuel economy, allowing an auto company to build even more SUVs without paying big government fines. The car companies win because they can sell more high-profit sport utility vehicles. The rest of us lose because, in reality, these vehicles get the same gas mileage as the non flex-fuel versions when burning regular blend gasoline. As for using E85, that’s another story.

For the consumer, just a tiny little downside

For most Americans, the “flex fuel” logo slapped on the back of their vehicle will remain just that – a logo. E85 can only be transported by train or truck – no pipeline exists to transport ethanol. Since most of the ethanol out there is made from corn, it’s found primarily in the Midwest. In fact, in 18 states you won’t even find an E85 pump at a gas station.

For the rest of us that do have a choice, the fact is, you’d better be a dyed-in-the-wool tree hugger if you want to sleep well at night. Although ethanol is, on average, 15% cheaper than gasoline, it is 30% less efficient in flex fuel engine applications. This means that at $2.39 per gallon, the actual cost of the 85% ethanol blend is over $4.00 per gallon when compared with the fuel efficiencies of a 10% ethanol blend in regular gas.

And even though you are burning a “renewable resource” like corn, the more you drive, the more it will cost you in added fuel expense. Whereas a gas-electric hybrid car will continue to add to your gasoline savings as you drive it, your E85 vehicle, when powered by biofuel, will continue to cost you more money the more it is driven.

But wait, there’s more…

In order to encourage ethanol refining, the federal government subsidizes each gallon of bio-based ethanol produced. Although the corn used in ethanol production is different from the variety used for human and animal consumption, the process still removes production capacity from traditional varieties that result in higher commodity prices on everything from corn flakes to soft drinks (think corn syrup).

And the winner is…

…not the consumer when it comes to flex fuel vehicles. If you’re in the market for a new car and really want to lessen your impact on the environment, choose a smaller vehicle and fill your tank with E10 – a 10% ethanol blend that can be used in any car. Your environmental footprint will be smaller and the knock to your wallet will be less, too.

Tags: cafe, e85, ethanol, Fuel Economy, hybrid, hybrid car, money for nothing, suv