Bush’s Proposed Fuel Rules Too Hazy

Commentary

Are you on the ethanol bandwagon yet?

Likely not, and the reason is because there appears to be a disconnect between the American public, Washington and U.S. auto makers.

For much of 2005, President Bush dragged his feet on meeting with Detroit’s Big Three, canceling twice before finally sitting down with the OEM chieftains in November.

General Motors Chairman Rick Wagoner, Ford CEO Alan Mulally and Chrysler CEO Tom LaSorda told the president their companies were prepared to make fully half their annual vehicle production biofuels capable by 2012, providing there was ample availability and distribution of E85 – an ethanol/gasoline blend – as part of an overall national energy strategy.

This is a doable goal for the auto makers, which by their own admission already have millions of flex-fuel vehicles (FFVs), capable of running on E85, on the road today because, they say, its the cheapest way to begin addressing alternative fuels.

But Bush has done the Big Three one better.

In his recent State of the Union speech, he asked Congress to pursue the goal of reducing U.S. gasoline consumption 20% over the next 10 years by boosting vehicle fuel-economy standards 4% annually, about 34 mpg (6.9 L/100 km), and increasing the production of renewable and alternative fuels fivefold to 35 billion gallons (133 billion L).

That’s a bigger bite than the auto makers are prepared for and not enough to please some politicians and environmentalists.

Nevertheless, the Union of Concerned Scientists, a non-profit group that bills itself as “citizens and scientists for environmental solutions,” estimates Bush’s plan would save 550,000 barrels of oil per day by 2017, “more than we currently import from Iraq.”

The increase also would cut 105 million tons (95 million t) of carbon dioxide – a major contributor to global warming – in that same year, “the equivalent to taking 14 million of today’s cars and trucks off the road,” the UCS says on its website.

So what’s wrong with this picture? For one thing, the auto makers stressed their goal only is attainable provided E85 fuel is available to customers.

Where in Bush’s speech was infrastructure mentioned? Ethanol currently is available at less than 1,000 of the U.S.’s 165,000 filling stations and creating a wide distribution network will require huge investments. Nor does he mention how E85 commercial production will be achieved.

And if there are millions of FFVs on the roads, where do you buy them?

Dealers currently are wrapping up a huge sales blitz to clear out bloated inventory. Where among all the newspaper and TV sales promotions is anyone talking about flex-fuel vehicles? And where are the government incentives to help convince buyers that E85 is the fuel of choice?

Says the UCS: “This will only be a breakthrough if the president and the Congress work together to pass a law guaranteeing that his goal becomes reality, while avoiding loopholes and escape clauses.”

Everyone knows what needs to be done, but who will take the initiative to get the bandwagon rolling? A lot of pieces have to fall into place over the next 10 years to achieve this national alternative-fuels goal.

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