Is this true?

So here’s a bit of hearsay.

First some background. Flex fuel cars are cars that can run on either petrol or so called E85. E85 is a fuel made with 85% ethanol and 15% regular petrol. The big picture reason to find E85 cars interesting is that they offer the potential to transition the installed base of autos from a oil based supply chain into a bio-fuel based one. The hope is that we can find a means to produce bio-fuels at reasonable price points. Setting aside my doubts about how hopeful that is I recently came upon this bit-of-info. I wonder if it’s are true.

Now the depressing rumor. The feds relaxed the fuel efficency requirements (the so called CAFE standards) for these cars as follows. In effect they decided that only the consumption of petrol would count in the ratings. So if the manufacture could make the case that 100% of his cars were using E85 rather then petrol he could calculate his miles/gallon based on the 15% of the fuel that was petrol. So rather than say 20miles/gallon he could claim about 120miles/gallon. Of course the presentage of of ethanol burnt wouldn’t be 100% but more like 20%; but that’s enough to provide a significant uptick in the CAFE numbers. For some car models, and for GM most of their models, this uptick is desperately needed. Otherwise they would have had to pay fines.

Just as an aside E85 isn’t as energy dense, about 30% less, as regular petrol, so it doesn’t get as good milage per gallon. One can only hope that’s reflected in the price at the pump.

We desperately need an exit strategy from the oil based transportation economy. Migrating that vast installed base is not going to be easy. E85 is one of the few scenarios out there that seems even slightly plausable. If the above is true it’s a shame. Since it suggests that GM’s only reason for advocating flex fuel cars was to avoid the tightening of the CAFE standards. Tightening the CAFE standards is, of course, about forcing the migration. So, if this is true it certainly taints the motives behind GM’s marketing campaign for it’s flex fuel vechiles.


Here’s an article about the so called Flex-Fuel Loophole.

The dual-fuel credit creates a stark difference. A flex-fuel 2005 Chrysler Sebring was rated at nearly 46 miles per gallon for the purposes of the federal mileage standards. Its actual miles per gallon running on conventional gasoline in a government test: Less than 28.

0 thoughts on “Is this true?

  1. Jamie McCarthy

    E85 isn’t even slightly plausible. When you factor in farm machinery, fertilizer, etc., a gallon of ethanol creates more greenhouse gases than a gallon of gas. It’s a scam.

    I think recentralization is the answer. Convert the fleet to hybrid cars, get them all plugged in, and let their gas engines go vestigial. Once the 200 million vehicles are power-source agnostic, the problem is merely converting 500 power plants from coal to nuclear/wind/hydro. That’s a pretty cheap problem, relatively speaking.

  2. Ben HYde

    I agree that ethanol is not plausable, unless… there are some breakthrus in the biotech area that enable the use of cellulous; but even then it’s not clear if the numbers work. With those breakthrus I’m confident it will have a role to play.

    Meanwhile the energy accounting of the corn -> ethanol story is another offensive lie right up there with the denial about the life cycle costs of nuclear energy. There is an awful lot of denial and delusional thinking going on all over this puzzle.

    I agree that condensing the population distribution could help. But note that means tha ll of use who live in urban or near urban areas had better get ready to take a significant uptick in densitiy in our back yards.

  3. Doug

    I think the great thing about enthanol and plug-in hybrids (which I have to imagine are on their way to market reasonably soon) is that they give the consumers a choice as to which energy source to tap. If (and I know this is a big IF) we could reduce our petroleum usage in our automobile fleet by 5-10%, that would have a huge impact on the energy market. To me, the actual alternate fuel source(s) aren’t really the important part of the equation, it’s that there is a choice and that choice can drive significant changes to the market as customers move to where energy is the cheapest. Lock-in creates a lack of elasticity in the market and generates inefficiencies.

    Out here on the left coast, anecdotally speaking there are far more hybrids on the road than pure economic sense would dictate. It really seems to me that — out here, anyway — social conscience/pressures/status are (and/or have been) a far more effective mechanism of change than CAFE. Sure, we also have our fair share of gas guzzling, one-person SUVs, but you’re always gonna have those where you have people willing to spend the money on ’em.

    Energy is going to be a interesting topic during our lifetimes. No question about it.

  4. Bob from ALAMN

    The CAFE standards have always provided automakers who produce FFVs extra credit, regardless of what kind of fuel the cars, trucks and vans actually used. So this is nothing new. However, this does not make E85 a poor fuel. We at the American Lung Association of the Upper Midwest strongly support E85 and biodiesel fuels because they can reduce air pollution.

  5. Koranteng Ofosu-Amaah

    There are those who believe there is a Great Game at work with the current ethanol madness. That linked article paints a quite plausible picture of the distortions caused in the Brazilian economy.

    Surprisingly enough, it all seems to come from the lobbying efforts of the two untouchables in American politics: the corn and sugar lobbies (they are even more effective than that military industrial complex or that middle eastern one)…

    I think you wrote something a while back about power laws/Gladwell and how the rich are very different from us, I think the lessons in that piece would apply here. The corn and sugar industries can get away with plain arbitrage and the fact that the automakers (with their current pension cram-downs) are also looking for easy money only accentuates things further… A responsible government would look at this alliance of vested interests and stare them down, but it’s silly season so we need to ban gay marriage…

    If only I had money to invest these days…

    I will say one thing, if you’re interested in network economics, arbitrage and coordination costs, you’ve got lots of source material to play with…

  6. Stephen M (Ethesis)

    This is an issue that Brazil is raising with the WTO as they want to sell ethanol to the United States at about $30.00 per barrel and aren’t happy we won’t let it in.

    So yes, it is possible, though the other posters have discussed what is probable.

    But look more at Brazil.

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