For years it required environmental fervor to justify pumping ethanol in your tank. It often cost more than gas and delivered fewer miles per gallon. Now, if you have the right car and live near a pump that sells it, e85 fuel -- a blend of 85 percent ethanol and 15 percent unleaded gasoline -- may also make economic sense.
KANSAS CITY, Mo. — For years it required environmental fervor to justify pumping ethanol in your tank. It often cost more than gas and delivered fewer miles per gallon.
Now, if you have the right car and live near a pump that sells it, e85 fuel -- a blend of 85 percent ethanol and 15 percent unleaded gasoline -- may also make economic sense.
Advocates have long promoted the renewable fuel as a clean alternative to foreign oil. "But a lot of people are beginning to look at just the price," said Robert White, a spokesman for the Kansas Corn Growers Association. "A 50-cent savings in price catches your attention."
Advocates are seizing the moment to preach the gospel of ethanol and score with consumers numbed by soaring gas prices. While the average price of regular this month reached $2.23, consumers could buy e85 for as little as $1.69 a gallon.
Not everyone is sold. Some critics say it still costs too much to produce ethanol. A big reason for the price difference is the 51-cent government credit paid for each full gallon of ethanol.
And e85 will work only in a flexible-fuel vehicle. It can harm engines not equipped to handle its larger dose of alcohol.
Another problem is it's hard to find.
Only three Kansas City area stations sell e85. Out of 180,000 stations in the nation, only 400 sell e85. Consumer groups say oil companies are reluctant to sell it because they lose profits. But industry officials say it simply has been too costly up to now to transport, blend and pump e85.
As interest grows and gas prices rise, however, ethanol is gaining broader support. The Consumer Federation of America said blending more ethanol with gas could save Americans 5 to 8 cents per gallon.
"It's definitely a plus," said U.S. Sen. Jim Talent, a Missouri Republican. Last month he and Sen. Barack Obama, an Illinois Democrat, introduced a bill that would pay incentives to stations that installed e85 pumps.
"We're buying corn from farmers and not from the Saudis," Talent said. "Corn farmers are not a security threat," he said.
Automakers also are taking e85 seriously.
"Automakers are seeing more opportunities to fuel the vehicles and the cost of the upgrade has gone down," said Phil Lampert, head of the National Ethanol Vehicle Coalition. "In the next few years we would like to see all cars be flexible fuel," he said.
Steve Bump, a salesman at Roberts-Albright Pontiac GMC Truck Inc. in south Kansas City, drives a flexible fuel Sierra pickup. But only after reading a recent story in The Kansas City Star did he learn a Presto Conoco store a block from his dealership sold e85. "Any way I can save on fuel I plan to," he said. "It's a no-brainer."
Not everyone agrees. Critics say it takes more energy -- for tractors, fertilizer and plant equipment -- to grow and process grains into ethanol than ethanol provides in fuel.
"Kansas, I dare say, isn't producing corn by hand," said Cornell University professor David Pimental, a leading critic. As gas prices rise, he argues, so do the costs to ethanol producers. "We're importing more oil to make ethanol. You are still helping the Saudis," he said.
Government researchers say that might have been the case 10 to 20 years ago but not now.
Robert McCormick, senior fuels engineer for the National Renewable Energy Laboratory in Denver, said new studies show that improved efficiencies and better technology have made ethanol cheaper to produce. "There is a positive balance now," he said.
E85 does provide fewer miles per gallon than regular gas, in part because it contains more oxygen. In the laboratory, e85 produced only 73 percent as much energy as gasoline.
But government researchers say the lower mileage estimates in lab tests are misleading. In real world experience, they say, e85 delivers 85 percent to 95 percent as much energy as gas, mainly because it burns more efficiently in an engine. They say motorists may experience a two- to five-mile per gallon loss in mileage, depending on the vehicle.
Researchers also say ethanol's higher octane produces equal or better performance than regular gas while it also results in fewer toxic emissions.
Michael Martin of Independence is a new convert to e85. He uses it in his two-month-old Ford Explorer Sport Trax. His owner's manual estimates a 30 percent loss in mileage using e85, which he figures is a drop to about 13.6 miles per gallon.
But Martin thinks he can do better. "I really think that my driving style will keep it at about 16 miles per gallon." At that rate, he figures he can break even if regular gas hits $2.10 or more a gallon and if he can still buy e85 at $1.69 per gallon.
"A lot of things to play with here -- but it is nice to have this option if gas does go to unaffordable heights," he said.
Increased supply, resulting in a temporary glut, is one reason ethanol prices have not risen along with gas prices. The country's 81 plants produced a record 3.41 billion gallons of ethanol last year. The industry hopes to double that in the next five years.
In fact, ethanol prices have remained the same or dropped while gas prices have risen more than 20 percent in the past year, according to the Consumer Federation of America.
"In the past the pricing of ethanol kind of tracked gas, but in the last 90 days, unleaded has continued to rise but ethanol has leveled off," said Mark Dehner, marketing manager for Growmark Inc., a fuels marketer in Bloomington, Ill. "That makes it more economically friendly."
After ethanol is produced at a plant, it is trucked or shipped by rail to pipeline terminals where distributors blend it with gas and truck it to pumps for sale to consumers. The price is adjusted by taxes, supplier and retail costs and the federal alternative fuels credit.
Last month Midwest distributors paid nearly $1.90 for a gallon of regular gas. In contrast, they paid about $1.21 to $1.24 for a gallon of e85, after the 51-cent per-gallon ethanol credit was applied (which comes to about 44 cents for a blended gallon of e85).
"That's a pretty nice rebate," said Jefferson City distributor Tom Kolb, co-owner of Jefferson City Oil and Midland Oil, which put in the first e85 pump in Missouri.
He credited the federal incentive and stepped-up production for holding down prices and spurring greater demand among consumers for alternative fuels.
Kathy Johnson, manager of the Presto Conoco station at 649 E. Bannister Road in south Kansas City, said her sales of e85 have doubled in recent weeks, from about 200 gallons to 400 gallons a day. "It gets to where when people use it, it's all they want," she said.
So why not advertise it? Nowhere, outside of one pump, does Johnson's convenience store promote e85.
She said that's partly because the chain hasn't, until lately, viewed e85 as a viable product. "I had to fight with them all last summer to keep it. I won."
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Source: Knight Ridder/Tribune Business News
