"Carmakers Spurn Flex-Fuel Bill, Say Every Buck Needed for Advanced Technologies" Green Car Advisor

Carmakers Spurn Flex-Fuel Bill, Say Every Buck Needed for Advanced Technologies

By Scott Doggett, Contributor

The Detroit 3 and eight other major automakers adamantly oppose a bill in Congress that would force them to produce more flex-fuel vehicles, and their opposition has merit.

At a time when lawmakers and the White House are pressuring America's carmakers to produce vehicles that are fuel efficient and competitively priced, Democratic Rep. Henry Waxman of California has introduced legislation that would create an "open fuel standard" requiring automakers to produce more cars and trucks capable of running on high blends of alternative fuels, assuming the fuels and infrastructure supporting them are available.

Democratic Representative Eliot Engel of New York says that's not enough. He's said that he might introduce legislation that would require half of new U.S. cars and trucks to be flex-fuel capable starting in 2012, with the mandate jumping to 80 percent by 2015 - regardless of fuel availability.

To count as flex-fuel capable, internal combustion engines would need to be able to run on blends of E85 (a fuel mixture containing 85 percent ethanol by volume) or M85 (a methanol fuel mixture), and diesel vehicles would need to be able to operate on biodiesel.

The Alliance of Automobile Manufacturers, a trade group representing the automakers, contends that adding flex-fuel technology will increase the price of each vehicle by at least $100 to $300.

A high-volume engine such as the one pictured here can be converted to flex-fuel capability for $300 or less, the alliance says. But Alliance President Dave McCurdy noted in a letter to members of Congress last week that a mandate would increase costs dramatically because the technology cannot be applied easily to some powerplants.

Beyond Capacity

McCurdy had previously stated that automakers already are building more flex-fuel vehicles than the fueling infrastructure can support.

To date, 1,877 (or a little more than 1 percent) of the 170,000 filling stations in the U.S. sell ethanol, the most common form of flex fuel in the country, according to Department of Energy figures. Only 683 of the 170,000 stations sell biodiesel and far fewer sell methanol.

McCurdy wrote that the trade group "stands ready to help solve our nation's energy problems. However, mandates to produce vehicles for which there is inadequate fuels or fueling infrastructure should be opposed."

In addition to unnecessarily boosting the price of vehicles, the mandates will divert important limited resources away from the development of other advanced vehicle technologies, he wrote.

Cheap Technology

Supporters of flex-fuel mandates argue that the technology is relatively inexpensive to add to fleet offerings and that an increase in the number of flex-fuel vehicles on the road will create the market incentives needed to spur growth of alternative-fuel production and distribution, helping to break the nation's dependence on foreign oil.

And despite the flex-fuel mandate, the recent energy and climate efforts by Congress offer significant financial perks for the ailing auto industry.

They would double a $25 billion Energy Department loan program to help carmakers and parts suppliers produce more fuel-efficient cars and trucks, they would create a "cash for clunkers" program to pay Americans to scrap their old vehicles and buy new fuel-efficient ones, and they would give the industry free allowances - starting at 3 percent of the allocations, before being slowly phased out - in exchange for making more advanced cars and trucks, such as all-electric and hybrid vehicles.

So while the automakers' lobbyists over at the Alliance have good reason to complain about the proposed flex-fuel mandates, it would be more than a little absurd to suggest that Congress and/or the administration have treated the Detroit 3 et al shabbily since President Obama took the reins a little more than four months ago.