LAKE ODESSA, MI – One of General Motors Corp. powertrain chief Tom Stephen's PowerPoint slides solicits a chuckle from his audience during a recent media briefing at the $62 million U.S. BioEnergy Woodbury ethanol production plant here.

A photo of a service station's billboard listing the latest price of unleaded-, medium- and premium-grade octane reads in descending order: “Arm, Leg, First Born.”

But with gasoline prices at historic highs and expected to keep climbing, the potential of biofuels, such as E85 ethanol, a blend of 85% ethanol and 15% gasoline, to help reduce America's dependence on petroleum as well as slow down global warming is no laughing matter, Stephens says.

“When I was a boy (growing up in farm country), I liked driving the tractor,” GM's group vice president-global powertrain & quality, recalls.

“I particularly liked fixing it. I never thought (someday) we'd be using corn and stems and stalks for fuel.”

Indeed, GM is revving up its new image, from producer of fuel-thirsty vehicles to developer of advanced powertrain technologies and environmentally friendly corporate citizen.

Among the auto maker's efforts, it is embracing a “yellow” campaign with its current offering of 14 cars and light trucks and vans in the U.S. that can run on corn-based E85, and a pledge to build 400,000 additional units annually if the necessary infrastructure is in place.

The company already has 2 million flex-fuel vehicles (FFVs) on the road in the U.S., Stephens says. In Brazil, FFVs make up more than 95% of GM's fleet, and in Europe the Saab 9-5 BioPower model is the best-selling FFV.

By the end of 2006, Stephens says there were more than 6 million flex-fuel-capable vehicles on U.S. roads. If all those vehicles were running on E85, “we would displace the need for 3.6 billion gallons (13.6 billion L) of gasoline per year,” he says.

Domestic auto makers could displace 22 billion gallons (83 billion L) of gasoline annually over the next 10 years, and all vehicle manufacturers could increase the savings to 37 billion gallons (140 billion L), he says. E10, consisting of 10% ethanol, could save an additional 10 billion gallons (38 billion L).

But beyond fueling automobiles, experts here say ethanol is a renewable source of energy that provides the U.S a means of self-reliance. Global energy demand is growing 1.6% per year, which is why a collaboration of government, the auto industry, energy suppliers and academia is necessary.

“We will go from 205 million barrels of oil per year to 335 million barrels by 2030,” Stephens says, quoting U.S. Department of Energy statistics.

Challenges to attaining a necessary supply of conventional oil to meet future needs include geopolitical issues and insufficient refinery capacity, he says. “Natural disasters, wars, hostile regimes all can take significant capacity offline. We need to create more energy diversity.”

However, there is no silver bullet for powertrain or energy technology, Stephens says. The wide range of vehicle usage today requires a comprehensive powertrain technology strategy.

A blending of liquid fuels with electricity and hydrogen will serve as the in-vehicle energy carriers for the foreseeable future, with hydrogen being the advanced propulsion goal for the long term, Stephens says.

GM has been building toward this vision with an array of concepts, from its Sequel fuel-cell hydrogen car to the Chevy Volt electric plug-in hybrid-electric vehicle.

And that's why the auto maker is supporting advances in research to commercialize and increase ethanol production through non-food, cellulosic energy sources.

Corn-based ethanol has been around for a while, at least in small quantities. Ford Motor Co. was the first to introduce it as an alternative car fuel in the '85 Taurus, and U.S. auto makers until recently have used it in a 10% blend with gasoline in order to satisfy corporate average fuel economy regulations.

Additionally, Brazil has been producing some form of ethanol fuel from sugarcane for the last 30 years.

But the potential of biofuels reportedly goes back to mid-19th century German inventor Nicolaus Otto, who envisioned his internal combustion engine running on ethanol, as did Henry Ford at the beginning of the 20th century with his Model T.

Research into making E85 from cellulosic sources – such as unused corn stalks; municipal, agricultural and forestry wastes; native grasses and other non-food plants – also has been ongoing. But it has taken on new urgency in the U.S., with 114 ethanol plants now in operation, producing 5.6 billion gallons (21 billion L) annually.

Additionally, some 87 ethanol plants are under construction or expansion that will provide another 6.4 billion gallons (24 billion L) of capacity.

Not everyone agrees the promotion of biofuels is a step forward. Critics say flex-fuel vehicles suffer from decreased fuel economy because E85 contains less energy than gasoline, requiring more frequent fill-ups.

Others argue the impact of crop growth, distillation and transport outweigh environmental benefits, and in some countries, such as Indonesia and Brazil, the impact already is destroying native ecosystems.

They also say biofuels set up a competition for food between cars and people. Given crude oil prices, the U.S. could produce as much as 30 billion gallons (114 billion L) of ethanol by 2012, but at the expense of more than half the country's corn, wheat and coarse grains, agricultural experts say, pushing food and other material prices to new heights.

Indeed, cellulosic ethanol, combined with the billions of gallons of corn-based ethanol already produced today, potentially could replace up to 30% of the nation's demand for energy by 2030, the National Renewable Energy Laboratory reports.

Similarly, Stephens says a GM/University of Toronto study supports DOE projections the country potentially could produce 90 billion gallons (341 billion L) of the combined ethanol biofuels in that timeframe, representing “60 billion adjusted energy gallons (227 billion L) of fuel.”

Michigan's Woodbury operation, alone, which opened in September and is one of six plants nationwide operated by the U.S. BioEnergy Corp., is expected to produce 50 million gallons (189 million L) of ethanol and 160,000 tons (145,149 t) of dried distillers grain each year.

Thus, there is the need for non-food sources, say industry experts gathered here by GM. The problem is cellulose in renewable materials used to make cellulosic ethanol must be pre-treated and then broken down into sugars before they can be fermented, a step called cellulosic.

Cellulose is an energy-rich carbohydrate that is the main structural component in green plants, found in stems, stalks and leaves. One of the primary technical and scientific challenges of making biofuels from cellulose involves designing a low-cost method for releasing sugar.

The pros and cons of the various cellulose materials and their pre-treatment processes currently are being evaluated in various research efforts that are under way around the country, including six DOE-funded pilot plants, with the goal of discerning which is the most efficient and scalable.

“It's possible to get this cellulosic ethanol industry within the next five years,” DOE Under Secretary for Science Ray Orbach said late last year.

Bruce Dale, director of the Biomass Conversion Research laboratory at Michigan State University, says he has been working for more than 30 years on ways to turn cellulose into ethanol.

His patented technology for pre-treating corn stalks, grasses, wood and other biodegradable materials currently is being used by an Iowa corn ethanol plant now being adapted for cellulosic ethanol as one of the six DOE test facilities.

Dale says cellulosic ethanol could be produced for $1.30 per gallon in the near future and about $1 per gallon by 2020. Another plus is that grain-based ethanol reduces greenhouse gas emissions by 29% and cellulosic ethanol by 86%, he says, quoting Argonne National Laboratory studies.

Additionally, Dale says energy derived from the waste portion of organic materials eventually could power ethanol production plants, eliminating the need for petroleum in the making of ethanol.

However, while ethanol improves powertrain performance with its higher octane, providing more horsepower and torque, it still needs to be blended with gasoline for cold-weather starts, a GM spokesman points out. In warm-weather regions, such as Florida, vehicles can run on 100% ethanol.

Stephens says ethanol plays a key role in GM's biofuels strategy and will continue to do so, noting the auto maker is prepared to make fully half of its annual vehicle production biofuels capable in 2012 provided there is ample availability and distribution of E85.

Since May 2005, the company has announced partnerships in 13 states to locate more than 250 E85 pumps. Earlier this year, Midwest retail giant Meijer Inc. opened its 20th E85 fueling site in its home state of Michigan as a result of a collaboration between Meijer, the State of Michigan, Texas-based fuel-dispensing equipment maker CleanFuel USA and GM.

GM also is beginning to push its 7,500 dealers to promote the merits of ethanol with online broadcasts and kits containing E85 tags, banners and consumer information.

The National Ethanol Vehicle Coalition estimates there currently are about 1,200 E85 fueling stations in the U.S. That number is expected to double next year once an Underwriters Laboratory certification of E85 pumps is issued, says Mary Beth Stanek, GM's director of environment, energy and safety policy.

Late last year, the independent testing agency raised concerns about potential safety problems associated with E85. Current fuel-pump components work fine with the 10% ethanol blend that is commonly found today, but higher concentrations can be corrosive.

However, U.L. said in April it had completed research of the issue and expects to renew its certification efforts by the fourth quarter. While not required by law, some insurers mandate such certification.

With more scientific arguments that global warming is a reality, President Bush calling for negotiations among the world's economic powers aimed at establishing a global target for greenhouse-gas reduction and the U.S. Congress weighing a new bill on more stringent fuel rules, GM clearly prefers to lead and not follow.

“We need to develop every option,” says Stephens. “'If not us, then who?' really applies here.”