From: Ken Thomas, Associated Press
Published June 29, 2006 12:00 AM

U.S. Automakers to Double Production of Flexible-Fuel Vehicles

WASHINGTON — U.S. automakers said Wednesday they will double production of flexible-fuel vehicles by 2010, adding vehicles capable of running on ethanol blends and other biofuels and reducing dependence upon foreign oil.


Writing lawmakers about their plans, the leaders of General Motors Corp., Ford Motor Co. and DaimlerChrysler AG's Chrysler Group urged oil companies and Congress to promote the production of ethanol and biofuel and increase the number of service stations offering the fuels.


"Our hope is that with this commitment, fuel providers will have even more incentive to produce ethanol and other biofuels and install pumps to distribute them," the automakers wrote.


The letter was signed by Rick Wagoner, GM's chairman and chief executive; Bill Ford, Ford's chairman and chief executive; and Tom LaSorda, Chrysler Group's president and chief executive.


The Big Three automakers have produced 5 million flexible fuel vehicles, which can run on gasoline and fuel blends of up to 85 percent ethanol, known as E85. They are expected to produce an additional 1 million of the vehicles this year. Their commitment would lead to 2 million annually by 2010.


In meetings on Capitol Hill last month, Wagoner, Ford and LaSorda stressed their work on alternative fuels. They also highlighted the lack of service stations offering the fuels. Only about 700 of the 170,000 gasoline stations nationally offer E85; most are in the Midwest.


The executives said if all the current flexible fuel vehicles were running on E85, "they would displace more than 3.5 billion gallons of gasoline a year, or a full year of gas consumption in a state such as Missouri or Tennessee."


But many obstacles remain. Bob Slaughter, president of the National Petrochemical and Refiners Association, said E85 blends are not practical in most parts of the country because the fuel is more expensive than gasoline and contains about two-thirds of the energy value.


"The idea that industry should just rush ahead, make investments on E85 just on the chance -- not very likely -- that it will gain widespread acceptance just doesn't make any sense," Slaughter said.


Environmentalists contend that few flexible fuel vehicles ever use ethanol blends and note that automakers receive a credit of 1.2 miles per gallon on federal fuel-economy requirements by producing the vehicles.


"The reality is that they're getting PR benefits by claiming to be green when they're actually taking advantage of a loophole that increases our oil consumption and pollution," said Dan Becker, director of the Sierra Club's global warming program.


GM currently produces 400,000 of the vehicles, which typically cost a few hundred dollars more to produce, and plans to at least double their production to 800,000 by 2010, spokesman Greg Martin said. Ford said it would double their offering to 500,000 by 2010.


Chrysler said it would produce 500,000 of the vehicles by 2008; the automaker already builds a Jeep Liberty diesel model that is delivered with 5 percent biodiesel blended fuel. The automakers said the production numbers were estimates but the companies were committed to reaching the 2 million mark by 2010.


Source: Associated Press


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