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Catch-22 Seems to Keep Momentum From Building for Alternative Fuel Ethanol

Posted on: Tuesday, 28 February 2006, 18:00 CST

By Debbie Kelley, The Gazette, Colorado Springs, Colo.

Feb. 28--The alternative fuel ethanol falls into the chicken-versus-egg debate of which comes first.

It's been tough for the industry to build user volume when there are few pumps that dispense E85, a blend of 15 percent gasoline and 85 percent ethanol made from corn, sugar cane or biomass waste.

As Bernie Lange of the Colorado Corn Growers Association notes, "People don't want to have to drive 20 miles to fill up."

But station operators like Acorn Petroleum President Harlan Ochs, who owns four of the state's 10 pumps, are reluctant to open more E85 fueling sites when sales remain "relatively low."

"We believe there is a place for ethanol and are putting energy into supporting a renewable resource that reduces our dependence on foreign sources of oil and burns cleaner," Ochs said. "But the expense of adding pumps doesn't seem to warrant the low volume we've been having."

Ochs' E85 pumps are at Acorn gas stations he owns in Colorado Springs, Pueblo, Brush and Aurora. Nationwide, there are 150 fueling pumps, most owned by independent companies or farmer co-ops, according to the Renewable Fuels Association.

"It's a grassroots effort at this point; big oil doesn't like us because we're treading on their territory," said Lange, communications and marketing director with the Colorado Corn Growers Association, a trade group that promotes the use of ethanol.

E85 prices per gallon vary; some stations charge more than regular unleaded gasoline, others less, which Lange said also affects usage.

"The competition isn't there, so the market is driven by the individual retailer," he said. "In reality, E85 should cost 30 to 40 cents a gallon less at the pump than regular unleaded gasoline."

Several movements are drawing more attention to the industry though, which may ignite demand. The Bush administration's drive to reduce America's "oil addiction" has brought alternative fuels, including ethanol, into the limelight.

President Bush's Energy Policy Act of 2005 calls for the production and use of ethanol to double by 2012 to 7.5 billon gallons annually. The nation has 95 ethanol manufacturing plants, two of which are in Colorado, with 31 more under construction, including five in Colorado.

The growing commitment from automakers also is generating public awareness for what many peg as the best fuel alternative for gasoline-powered engines.

Approximately 5 million "flexible fuel vehicles" have been sold in the United States, according to the National Ethanol Vehicle Coalition. Flexible fuel vehicles are equipped at the factory to run on E85; no aftermarket modification is available. They also can fill up with straight gasoline.

This year, Ford Motor Co. and General Motors Corp. will build about 600,000 FFVs. Models range from the Ford F-150 pickup and the Ford Taurus to the Chevrolet Suburban and the Chevrolet Impala. DaimlerChrysler's Dodge Ram, Durango and Grand Caravan also come as FFVs, and Nissan's Titan pickup has joined the pack.

The price of FFVs is comparable with their gasoline-powered counterparts, said Dick Wright, a Carlin Dodge salesman who works with small-business owners. The recent attention on alternative fuels is accelerating local interest, he added. "As it's publicized more and more, we get more and more questions from individuals," he said.

Some states, such as Minnesota, have mandated that all gasoline sold contain a 10 percent to 20 percent blend of ethanol, which gasoline engines can use with no modifications.

Lange said a mere 10 percent ethanol blend can reduce harmful carbon emissions up to 25 percent, while E85 is virtually emissions-free.

"It's the fuel of the future. It's something responsible Americans need to consider," he said.

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Copyright (c) 2006, The Gazette, Colorado Springs, Colo.

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F, GM, DCX, 7663, NSANY, 7201, RNO,

Source: The Gazette

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