SIOUX FALLS, S.D. -- South Dakota's congressional delegation favors extending an incentive intended to promote ethanol use, despite criticism that it actually helps increase dependence on foreign oil, reported The Argus Leader.
The flexible-fuel credit allows car companies to meet part of their minimum fuel economy targets by producing more flex-fuel vehicles (FFVs). These vehicles are capable of using E85, a fuel composed of 85% ethanol.
Yet many FFVs are large, "gas-thirsty" trucks and sport utility vehicles, said the newspaper, [image-nocss] and most owners do not actually use E85. Thus, the credit allows Ford, GM, Chrysler and other companies to comply with government fuel efficiency requirements by producing a fleet that falls up to 1.2 miles per gallon short of those requirements.
But automakers and E85 proponents argue that the credit did what it was supposed to do. It put more flex-fuel vehicles on the road, said the report.
"On the one hand, it was tremendous success," Phil Lampert, director of the National Ethanol Vehicle Coalition, Jefferson City, Mo., told the paper. "But on the other hand, it was a dismal failure," he said. "It did not address the infrastructure and the fuel utilization."
The argument is not about whether to use more E85, a common goal on both sides, because the fuel benefits corn farmers and can reduce pollution and foreign oil imports. The argument is about how to build the vehicles, pumps and consumer demand needed to meet that goal, according to the report.
Lampert said one of the reasons so many FFVs are big vehicles is that his coalition wanted it that way. "The automakers asked us what vehicles we wanted them to build in E85, and we said, 'Why not your most popular vehicles?'."
That is a key part of the companies' argument: They only can give consumers what they want, they cannot make them use alternative fuel. "We hope to reach a critical mass when we have enough vehicles on the road that the fueling stations see that it's in their economic interest to sell E85," Eron Shosteck, spokesperson for the Alliance of Automobile Manufacturers in Washington, D.C., told The Argus Leader.
To that end, the U.S. House passed a six-year extension of the flexible-fuel credit as part of its energy bill, with the support of Representative Stephanie Herseth (R-S.D.). Senators John Thune (R-S.D.) and Tim Johnson (D-S.D.) both favor the extension, which might be included in the Senate's version of the energy bill.
"Flexible-Fuel Vehicles are one tool toward encouraging and ensuring that there will be a workable market for renewable fuels. They are not the only solution, but it is one piece of the puzzle," Johnson said in a statement. Johnson reportedly also favors a tax credit for retailers who install E85 pumps, and a requirement that car dealers inform buyers when they are buying an FFV.
But David Friedman, clean vehicle researcher for the Union of Concerned Scientists in Washington, said the vehicle credit should be scrapped. "We've got enough vehicles out there. Why should we still be increasing our oil dependence?" he told the paper. "Now, let's move to a future where these vehicles actually use the fuel."
Research from UCS shows that automakers have used the credit to justify building vehicles that burn more gasoline and fall short of the federal corporate average fuel economy (CAFE) requirement, he said. A UCS analysis of government data says that Ford's light truck fleet had an average fuel economy of 20 miles per gallon in 2003. To meet the mandatory minimum of 20.7 mpg, Ford built enough FFVs that, assuming half of them used only E85, the fleet would get 21.2 miles per gallon of gasoline. That is allowed under the credit program, though the federal Department of Transportation said that assumption is false.
Friedman said the credit amounts to a loophole that has given the auto industry $1.6 billion in benefits, at a cost in the hundreds of millions.
But Lampert insists the credit is still the most practical way to continue promoting FFVs. In the long run, though, he has a proposal that Friedman said he agrees with. "Our preference would be for every motor vehicle to be a flexible-fuel vehicle," he said.
To view Herseth's Renewable Fuels: An Essential Part of National Energy Policy, click here.
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