Wednesday, March 14, 2007

Ethanol still a long way off in U.S.


A shortage of stations is keeping the corn-based fuel from catching on.
Production issues could take years to address.
By John O'Dell, Peter Pae and Ronald D. White, Times Staff Writers
March 10, 2007

SAN DIEGO — The ethanol pumps weren't very busy Friday at California's
only public alternative fuel depot as President Bush and Brazilian
President Luiz Inacio Lula da Silva promoted a pact to increase the
production of ethanol and other fuels made from plants.

During an otherwise busy three-hour stretch Friday afternoon, only one
driver pulled into Pearson Fuel to pump a blend of 85% ethanol and 15%
gasoline. Co-owner Mike Lewis said ethanol accounted for less than 5% of
the fuel he peddles, while gasoline outsells all the other fuels
combined — ethanol, oil and plant-based diesels, natural gas and propane.

"People love to be green," Lewis said, referring to alternative fuels'
environmentally friendly status. "But they like green in their wallets

Unless ethanol is at least 50 cents a gallon cheaper than gasoline,
"people don't buy it," he said.

Pearson Fuel, with its alternative-fuels education program for schools
and its six fuels for internal combustion engines, may be the fuel
station of the future. But it's a distant future.

Bush wants Americans to produce and use ethanol, a fuel made from the
alcohols refined from plant material, to help reduce the nation's
dependence on fossil fuels, particularly those imported from abroad.

The goal of Friday's agreement with Brazil is to make ethanol an
international commodity through technology sharing and other cooperative

However, experts say the accord between the two countries, which already
produce 70% of the world's ethanol, would do little to boost production
or use of biofuels by the end of the decade beyond the levels already

In his State of the Union address in January, Bush called for annual
national production of 35 billion gallons of ethanol by 2017, up from 5
billion gallons in 2006. But more than an international acknowledgment
that biofuels are desirable, the U.S. needs development of better ways
to make it and an efficient way to transport and deliver it to retail
customers, experts said.

Although Bush and others regularly point to Brazil as an example of what
a determined nation can do to reduce its dependence on oil — most motor
vehicles in Brazil run on a blend of 80% ethanol and 20% gasoline —
there are huge differences. Brazil has been subsidizing its ethanol
industry for several decades, and has a huge crop — sugar cane — that
can efficiently be refined into ethanol.

In the U.S., ethanol development has only just begun and it is now based
entirely on product derived from corn. And squeezing the ethanol from
corn kernels requires more processing, and more expense, than refining
it from most other plant materials.

To protect the nascent industry, the U.S. government imposes a
54-cent-a-gallon tariff on ethanol imported from Brazil. The U.S. also
grants tax credits to American corn growers and a subsidy of 51 cents a
gallon to companies that make gasoline-ethanol blends.

To achieve Brazil's results, the U.S. would have to turn all of its
crop-producing acreage over to corn and use all of the corn for ethanol,
said Eric Wittenauer, a St. Louis-based energy analyst at A.G. Edwards &
Sons Inc.

"We would also have to double the fuel efficiency of our cars and
trucks," said David Friedman, vehicle research director and fuel
efficiency specialist for the Washington-based Union of Concerned

That's not likely to happen.

In fact, while corn growers lobby intensively to keep their crop at the
top of the biofuel heap, tremendous research efforts are underway to
develop cost-effective methods of distilling ethanol from other types of
plant material, said Sharon Shoemaker, executive director of the
California Institute of Food and Agricultural Research at UC Davis.

That alternative type of ethanol could go a long way toward helping Bush
achieve his goal of a 20% reduction in gasoline consumption over the
next decade through increased use of ethanol and other biofuels.

"Very rapidly the doors are opening," Shoemaker said.

Automakers are climbing onto the bandwagon, some more quickly than
others, with General Motors Corp., Ford Motor Co. and Chrysler Group
pledging to make at least half their vehicles ethanol burners by 2010.
There are 32 models available today, most of them large pickups and
sport utility vehicles.

But it's at the pump where ethanol backers face several challenges.

Of the more than 165,000 gas stations in the country, only about 1,000
offer E85 ethanol, the name for the 85% ethanol blend, and most of them
are clustered in the corn-producing Midwest.

In California, which has more cars and trucks on the road than any other
state, there are four ethanol stations, and Pearson Fuel is the only one
open to the public.

Many of those flex-fuel GMs and Fords being sold these days, like
Katherine Gagnon's late-model Ford Explorer, are a lot more familiar
with gasoline than with the stuff the president hopes will start
replacing it.

Gagnon, the only customer to use Pearson Fuel's ethanol pump Friday
afternoon, said it was the first time in several months that she'd
bought E85, and only because she happened to be driving by and saw that,
at $2.88 a gallon, it was a dime cheaper than the last time she bought
some and 11 cents cheaper than Pearson's regular gas.

"I wouldn't come here to get it just because it was a dime cheaper," the
San Diego resident said. "It would have to be a lot more for me to make
a special trip, but I was driving by."

California's one-station situation makes it tough for people who own
flex-fuel vehicles to wean themselves from gasoline.

"They call it an E85 vehicle, but what good does it do when you can't
get the fuel?" Carlsbad resident Mary Oren told a reporter during a
telephone interview Friday. She said she would use nothing but E85 in
her 2004 GMC Yukon SUV, even if there wasn't a price differential, if it
were convenient to buy.

But Oren would have to drive 30 minutes each way to fill her Yukon at
Pearson's pump, and that's just not practical, she said.

"We own an American-made car, we like to use fuel produced locally, but
it requires planning," she said. "Consumers have waited a long time for
alternative fuels, but we have been teased."

Phil Lampert, whose job as director of the National Ethanol Vehicle
Coalition makes him the fuel's head cheerleader, agrees.

He's a resident of Minnesota, where copious supplies of corn have
spawned a considerable ethanol industry: There are 312 publicly
available E85 stations there, one for every 16,666 residents. That
compares with one for 36.5 million residents in California.

"It's been difficult in California," he said. "But we're hoping to see
25 to 30 new E85 stations opened there this year."

At best, that would boost the ratio here to one station for each 1.2
million people.

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