SACRAMENTO – You know you are in environmentally conscious California when special freeway lanes, restricted to vehicles carrying at least three people to encourage car pooling, now are accessible to motorists driving hybrid-electric vehicles (HEVs).

You know you are in image-conscious California when hybrid vehicle owners complain about the loud color of the yellow window stickers they must display in order to use the lanes without penalty.

“The public hates the color – which apparently clashes with most standard car colors – but they love their hybrids,” says Douglas Wilson, California Department of Motor Vehicles’ manager-registration, titling and policy.

The DMV so far has issued 50,000 special-lane stickers to HEV owners. State law allows issuing up to 75,000 stickers, Wilson tells the California New Motor Vehicle Board’s 5th annual auto industry roundtable here.

California has the nation’s toughest vehicle emissions standards. The state is a bastion for those advocating electric cars and alternative fuels. Many of those advocates participate in the roundtable. Some emphasize they’re not anti-auto industry.

“Let me say that I love cars,” says Jim Boyd, a member of the California Energy Commission. “But it is dangerous to be dependent on just one type of fuel. We need a diversity of fuels and cleaner-burning fuels.”

Roundtable participants cite the advantages and disadvantages of particular alternative fuels. Sometimes disadvantages are associated with regional economic concerns, as is the case with ethanol and its connection to Midwest corn farmers.

Elizabeth Lowery, General Motors Corp.’s vice president-environment and energy, says many consumers are unaware GM has sold 1.5 million vehicles that can run on E85, a fuel mixture of 85% ethanol and 15% gasoline.

Among those who don’t know are many owners of such “flexible-fuel vehicles,” says Boyd.

Lowery says GM is committed to building more E85-compatible vehicles, but E85 fueling stations need to be “from coast to coast.”

Currently there are about 700 such stations in the U.S., mostly in the Midwest, the nation’s corn belt. Almost all American-produced ethanol currently derives from corn. (In Brazil, it’s made from sugar cane.)

An E85 fueling station in San Diego is California’s only one. Some Californians aren’t keen on E85. One reason: Not much corn is grown in California.

“There was talk about using the Imperial Valley to grow sugar cane because it is best for conversion to ethanol,” says Boyd. But the E85 movement “seems married to Midwest corn people,” he says.

Other E85 detractors are oil companies that only would get a 15% stake in the action if ethanol were to become a major fuel source, says Boyd.

He expects Gov. Arnold Schwarzenegger’s office to develop an alternative-fuel plan, one that would promote fuels derived from “California materials,” ranging from agricultural products to animal fat wastes.

One such prospect is bio fuel from dairy farms, says John Boesel, president of CALSTART, an organization that promotes clean and energy-efficient technologies.

“We have 2 million cows in this state,” says Boesel.

He is intrigued by various alternative fuels, from natural gas (“I drove up here in a car powered by it”) to fuel made from used French fry potato oil collected at restaurants.

He is not, however, a big believer in hydrogen fuel cells, which many people see as an energy hope of the future.

“There is a long bridge of uncertain length when it comes to hydrogen-fuel cells,” says Boesel. “There are huge cost barriers.”

But Catherine Dunwoody, executive director of the California Fuel Cell Partnership, sees great long-term potential in hydrogen-fuel cells, even though “it is a technology that is not quite ready for prime time.”

She adds: “People ask, ‘When can I buy a car powered by hydrogen-fuel cells?’ It will be a few years still. From five to 15 to 20, depending on whom you talk to. Auto companies need to overcome key challenges in cost, range, durability and delivery.”

Says GM’s Lowery: “Our long-term goal is hydrogen fuel cells.” But she adds: “One thing we have learned is that our customers don’t want compromises.”

Roundtable participants also differ on whether modern diesel engines have a place in powering vehicles in the U.S. in general and California in particular.

New diesel engines offer up to 30% better fuel economy without spewing the soot and tailpipe emissions of their predecessors.

Those old engines gave diesels a “black eye,” says Boyd. For modern diesels to overcome that, “some of us have to get old enough to stop being consumers, because we remember the old diesel engines and won’t buy a car with a new one because of that.”

Dealer Fritz Hitchcock says new diesels would catch on in California if auto makers introduce them and promote their new-age technology.

“I can tell you people will pay over sticker for vehicles with diesels because of the value of the mileage and the torque,” says Hitchcock, who owns six dealerships in Southern California.

Peter Brown, AAA of Northern California’s corporate affairs director, cites a survey in which 66% of consumers say they would consider buying more fuel-efficient vehicles and 35% would consider buying HEVs.

But Boesel warns: “People sometimes say they’ll do one thing, then do something else when they go to a dealership.”

Meanwhile, the DMV’s Wilson predicts it won’t be long before California hits the statutory limit of issuing 75,000 stickers allowing HEV owners to use the special freeway lanes.

Quips dealer David Wilson, president of the vehicle board, “And dealers will probably be defending lawsuits because we sold someone a hybrid and they can’t get a sticker.”

sfinlay@wardsauto.com