AAA says E85 costs 8 percent more than gasoline on cost-per-mile basis

AAA is reporting the effective cost per mile of E85 is 8 percent higher than the cost per mile for gasoline. Though E85 sells for 18 percent less than gasoline, AA is factoring a 32 percent loss of mileage into its estimates.

n Iowa, lawmakers expressed disappointment that, two years after landmark legislation was passed in support of E85 conversion, E85 represents only 0.1 percent of Iowa fuel sales. 7.5 percent of Iowa fuel comes from renewable sources, about the same as two years ago when Gov. Vilsak signed a measure allocating $13.6 million to E85 conversion, and mandating that 25 percent of the state’s fuel usage come from renewable sources by 2020.

Lawmakers noted that E85 is available in half of Iowa’s counties, with only 100 pumps statewide, and that only 12 percent of new cars sold in Iowa last year are flex-fuel ready, mostly pickups and SUVs.

The Iowa state Renewable Fuels Association said that E85 sales increased 48 percent in the 3rd quarter of 2007, compared to the corresponding quarter in 2006. Total sales for the quarter were 941,547 gallons from 68 E85 stations. The figures, which represent 154 gallons per day per station, continue to underline a lack of appeal of E85 among drivers, although Iowa’s station owners increased E85 availability in the fourth quarter to 79 stations.

Even in Iowa, E85 is tough to find, and the general manager of the East Central Iowa Cooperative said “I don’t think flex-fuel even passes through someone’s head when they are buying a vehicle around here”. The sales manager of a Waterloo, IA Chevrolet dealership said that rising flex-fuel vehicle numbers are “mostly a coincidence”.

In Pennsylvania, fuel marketer Sheetz recorded a 50% drop in sales at pumps converted from gasoline to E85. Sheetz spent more than $150,000 last year on E85 conversion at three locations in Western Pennsylvania.

Part of the problem is a poor cost-benefit performance. A new cost-benefit analysis by researcher John Graham at the Pardee Rand Graduate School found that E85 scored the worst among all fuel options. Diesels performed the best, saving $2300 over a vehicle’s lifetime compared to regular gasoline. Hybrids were a close second, while E85 cost $1600 for fuel over vehicle lifespan. The study’s authors did not disclose the mileage standards used in the study, or the vehicles studied.

As a result of E85’s difficulties, Iowa Senator Chuck Grassley recently called on President Bush to direct the Environmental Protection Agency to approve E15, E20, E30 blends. Grassley said that with E85 not gaining acceptance, the US had to find other ways to ensure a market for higher blends of ethanol.
In support of Grassley, the American Coalition on Ethanol presented findings on research showing that cars running on E20 and E30 blends achieved better mileage than cars running 100 percent conventional gasoline. Scientists at General Motors, whose cars were involved in the test, were unable to explain how the ethanol blend, which contained 6 to 11 percent less BTUs, could get better mileage. In the tests, a Chevrolet Impala flex-fuel vehicle running E20 achieved 15 percent better mileage than when running 100 percent gasoline. Tests were also conducted on Toyota vehicles.

E20 efforts are on the rise on many fronts. USDA Under Secretary for Rural Development Tom Dorr, speaking at the NAFB’s Trade Talk event, told the Brownfield Network “Everybody that wants to invest has to have assurance that we can get past this E10 blend wall. The Department of Energy … and EPA are aggressively pursuing how to get to …. E15 or and E20.”

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