Obama's fuel-efficiency push may lead fleets to use more gasoline
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DETROIT (Bloomberg) -- President Barack Obama's plan to have the government rely on vehicles that use alternative fuels like ethanol may end up increasing rather than reducing gasoline use.
Federal employees last year received waivers to use gasoline in 55 percent of fleet vehicles capable of running on the ethanol blend E85 because E85 wasn't available, the Government Accountability Office found. The independent watchdog didn't estimate the amount of added gasoline use. Only about 1 percent of filling stations offer E85, which powers 86 percent of alternative-fuel fleet vehicles sold in the U.S. last year.
"If you don't have the infrastructure, it's going to be tough to use the fuel in these vehicles," said Brett Smith, an alternative-vehicle analyst at the Center for Automotive Research in Ann Arbor, Mich.
Obama said March 30 that all vehicles bought for the federal fleet starting in 2015 will be fuel-efficient or use alternative fuels, as part of a plan to reduce oil imports. To reach that goal, E85 will have to be part of the mix because hybrid and plug-in electric vehicles aren't as widely produced, cost more to purchase and don't have the durability required for some jobs performed by government vehicles.
In 2009, Obama's first year in office, the U.S. government increased gasoline use in vehicles 3 percent from the previous year even as he boosted hybrid purchases to about 10 percent of the federal fleet from 1 percent in 2008, according to data from GSA and the U.S. Energy Information Administration.
Overall government energy use fell about nine-tenths of 1 percent in 2009, the data showed. Figures for 2010 are scheduled to come out later this year.
Equipped for both
Ethanol constitutes 85 percent of E85, while most gasoline sold at U.S. pumps includes 10 percent ethanol. Cars and trucks that can run on E85 require engines equipped for the fuel as well as gasoline. Ethanol producers include Archer-Daniels-Midland Co., the world's largest grain producer; BioFuel Energy Corp.; and Poet LLC, a privately owned company that is the top U.S. producer of the fuel.
Vehicles that can run on E85 accounted for 37,590 of the 43,750 alternative-fuel fleet vehicles sold last year, according to the Energy Information Administration. There were a total of 1.05 million E85 vehicles sold in 2009, or 10 percent of U.S. auto sales, according to the National Renewable Energy Laboratory, a Department of Energy research facility based in Golden, Colo.
More than 8.2 million flex-fuel vehicles are on the road, or about 3.3 percent of the U.S. total, according to the Alliance of Automobile Manufacturers, a trade group based in Washington.
Trucks, SUVs
Many of the estimated 70 vehicles for the 2011 model year that can use E85 are trucks and sport-utility vehicles getting less than 20 miles per gallon when filled with gasoline. They include General Motors Co.'s Chevrolet Tahoe, Ford Motor Co.'s F-150 and Chrysler Group LLC's Jeep Grand Cherokee. Almost all vehicles bought by the U.S. General Services Administration are made by U.S. automakers, according to agency data.
"All the E85 vehicles are bigger, less fuel-efficient vehicles," said Roland Hwang, transportation program director for the Natural Resources Defense Council, a New York-based environmental group that has criticized the use of corn-based ethanol. "And they're going to be filled up with gasoline most of the time. Therefore they're going to use more gasoline than more fuel-efficient gasoline vehicles."
E85 is available at about 2,357 stations, primarily in the Midwest, according to the U.S. Energy Department. The U.S. needs about 53,000 ethanol or other alternative fuel-capable pumps to meet current federal requirements for 36 billion gallons of renewable fuel in use by 2020, said Robert White, director of market development for the Renewable Fuels Association in Omaha, Neb.
'Lot of strides'
A U.S. Agriculture Department program that started in the last two weeks is pushing for 10,000 pumps in the next five years, he said. The U.S. has about 162,000 fueling stations, according to the association.
"We've made a lot of strides over the last three years and we've had a lot more focus on getting pumps in population centers," White said, highlighting new pumps in Florida, Texas and California.
The group has been encouraging pumps that can be used by government vehicles as well as the general public, he said. A pump recently installed at the U.S. Navy base in Norfolk, Va., will be available for 4,000 military vehicles and accessible to retail customers, White said.
E85's trade-offs
The group is working with other ethanol retailers to locate pumps that will reduce the amount of waivers, which cover about 73,000 federal vehicles, White estimated. It should take many fewer than 53,000 pumps to serve the federal fleet, he said, without providing a firm estimate.
E85 burns less efficiently than gasoline, so on a mileage-adjusted basis it costs 11 percent more than gasoline, according to motorist group AAA. The average U.S. price of a gallon of gasoline on May 1 was $3.952 compared with $3.331 for a gallon of E85, AAA found.
Using gasoline in an E85 model means using about three times as much oil, according to the U.S. government's fuel economy guide.
For example, a 2011 Ford Fusion using E85 would consume about five barrels of oil a year and the same model using only gasoline would need 14.9 barrels, the U.S. data showed. For a 2011 GMC Sierra pickup, the comparison is 6.2 barrels a year with ethanol and 19 barrels a year with gasoline, the fuel economy guide indicated.
Postal fleet
The General Services Administration, which owns about a third of the federal fleet, says 51 percent of its vehicles run on alternative fuels, including E85. Of those, 88 percent are E85-capable, said Sara Merriam, a GSA spokeswoman.
The U.S. Postal Service owns 44,000 "alternative fuel- capable vehicles," which it said is the largest U.S. civilian collection, in its fleet of more than 216,000 vehicles.
In addition to E85-capable vehicles, alternative-fuel models include plug-in electrics, hybrid electrics, and those running on natural gas and fuel cells.
The Obama administration has highlighted all of them, focusing on electric vehicles by reiterating in this year's State of the Union address his goal of putting 1 million of them on U.S. roads by 2015.
Demand for hybrid and rechargeable cars may stay below 10 percent of U.S. sales through at least 2016, even as fuel prices rise, because of consumer concerns about their expense and utility, J.D. Power & Associates said in an April 27 report.
"If you don't count E85 it will be very difficult to find the technology in the marketplace, almost impossible, that can fill the needs of the government fleet," said Smith of the Center for Automotive Research.
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