E85 Pace Expected to Pick Up in Q4

The number of U.S. filling stations offering E85 could nearly double to 2,000 by year’s end – far short of the level required to make the eco-friendly fuel readily available.

But the pace of proliferation is expected to accelerate in 2008, suggests the Renewable Fuels Assn., the ethanol industry’s Washington-based lobby.

These predictions come on the heels of this year’s second meeting between President Bush and top executives from Detroit’s auto makers. The president left the Mar. 26 meeting encouraged by Detroit’s goal of dedicating half its production to vehicles that are E85-compatible.

Meanwhile, auto makers quietly have been complaining that they’ve been building so-called flex-fuel vehicles for several years already. General Motors Corp., Ford Motor Co. and Chrysler Group have put about 6 million E85-compatible vehicles on the road since approximately 1998, and that total will increase by 1 million this year.

in the face of rising gasoline prices – $0.12 higher than this time last year, at $2.64 per gallon ($0.70 per L) of regular unleaded, according to the American Automobile Assn. – consumers are growing anxious to get their hands on cheaper E85.

So, what’s the holdup?

“It is rolling out quickly,” says an RFA spokesman. “But there are a number of challenges. One has been (Underwriters Laboratory) certification of the E85 pumps.”

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

Just this month, Underwriters Laboratories said it had completed research of the problem and expects to renew its certification efforts by the end of fourth quarter.

Such equipment certification is not required by law, but it is mandated by some insurers.

“So you can anticipate that the pace of E85 (proliferation) will pick up,” the RFA spokesman says. “We’re seeing steady growth. While the industry has a very good safety record with E85 – we haven’t had any real problems – U.L. certification just gives people an extra level of confidence.”

About 1,100 of the nation’s 170,000 filling stations sell E85. The RFA says that number will be between 1,500 and 2,000 by year’s end.

The next step is to adjust ethanol production to accommodate increased demand for E85. The Bush Admin. has suggested a production target of 35 billion gallons (132 billion L) per year, up from the current 5 billion (19 billion L) gallons.

Currently, 99% of ethanol production is for the 10% blend. Shifting the balance toward E85 will require more dependence on cellulosic ethanol, made from renewable raw materials such as wood chips and switchgrass, and less dependence on feed crops such as corn.

“Once that becomes commercially viable and a significant part of the industry, then we can start talking about 35 billion gallons (132 billion L),” the RFA spokesman says.

In a joint statement issued after their latest White House meeting, GM, Ford and Chrysler said they “need government and fuel providers to increase infrastructure before we can make a meaningful impact.

“In addition, we discussed with the president that as part of an overall national strategy to fully tap the potential of biofuels to displace petroleum, vehicle production increases must be accompanied by continuing the incentives that encourage the manufacture, distribution and availability of biofuels, and the production of flexible-fuel vehicles,” the statement reads.

But hurdles such as the availability of cellulosic ethanol remain.

“We’ll constantly move the ball forward,” the RFA spokesman tells Ward’s. “(We) just can’t tell you how quickly.”

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