Ford Motor Co. and VeraSun Energy Corp. will collaborate on a U.S. ethanol-distribution corridor spanning from Missouri to Illinois.

Announcement of the partnership is the latest push to broaden the use of E85, a fuel mixture composed of 85% ethanol and 15% gasoline.

Under terms of the joint venture, Ford will provide seed money for VeraSun to construct “The Midwest Ethanol Corridor,” which is expected to increase greatly the number of E85 pumps throughout the Midwest.

“Today’s launch represents an important step toward wider accessibility of E85 for America’s drivers,” says Ford CEO and Chairman Bill Ford.

“Ethanol is an energy source straight from America’s farmlands. Ford, together with VeraSun, believes the corridor can help jumpstart the growth of E85 as we work to address the nation’s energy issues.”

Currently, fewer than 750 of the nation’s more than 180,000 retail fueling stations offer E85, Ford says.

Plans call for the program to be rolled out in two phases, with the first phase involving the conversion of gasoline fuel pumps to E85 in stations along I-55 in Illinois and I-70 in Missouri.

It is unclear how many pumps the auto maker has helped fund so far, but a Ford spokeswoman says 14 new pumps were added this week, bringing the total along the corridor to about 50. “So you could drive from Chicago to Kansas City and find E85 all along there,” she says.

Ford’s decision to locate the corridor along stretches of highway in Illinois and Missouri was based on the proximity of Ford facilities and logistical factors, the spokeswoman says.

“Those states were chosen because that’s where most E85 production takes place,” she says. “Also, we have a presence there with plants.”

The second phase of the partnership involves a public-awareness campaign, in which Ford will send out fliers to owners of Ford-made flexible-fuel vehicles outlining the VeraSun initiative and providing locations of E85 pumps.

While E85 awareness is gaining momentum, mainly due to efforts from the traditional U.S. Big Three auto makers, it’s not a “silver bullet” to cure the country’s thirst for foreign oil, critics say.

E85 has several notable drawbacks, including the price. According to pro-E85 website, E85 costs as much as $1 more per gallon than gasoline. Furthermore, E85 packs only about 60% of the energy of gasoline, resulting in 20%-25% lower vehicle mileage.

Despite drawbacks, Ford is pushing E85 harder than ever, announcing plans to build 250,000 FFVs this year. Ford says it expects to double the number of biofuel-capable vehicles it produces in the U.S. by 2010.

Currently, Ford produces four FFVs – the ’06 Ford F-160, Ford Crown Victoria, Mercury Grand Marquis and Lincoln Town Car.