Posted November 8, 2013
The U.S. Department of Energy’s flex-fuel vehicle (FFV) fleet apparently isn’t all it’s cracked up to be. A recent inspector general’s report found that DOE has been fueling its FFVs with regular gasoline instead of E85, eliminating many supposed environmental or cost benefits of having a fleet of cars that can use fuel containing up to 83 percent ethanol.
Two of DOE’s sites leased 854 FFVs at an additional cost of $700,000 over a comparable conventional fleet. In 2011, the managers of the cars were granted waivers for more than 75 percent of the vehicles so they could be filled with conventional fuel, “a practice that provided little or no environmental or economic benefit,” the IG said.
Here’s the significance in the ongoing debate over the Renewable Fuel Standard (RFS) and its mandates for ever-increasing ethanol use: Although the ethanol lobby keeps touting the benefits of FFVs and E85, the situation with DOE’s FFV fleet illustrates the fact that even the government, which was mandated to use the product, didn’t want to use it. This is consistent with the experience of the general public, which hasn’t accepted the use of E85 in their FFVs.
But there are other problems. There are slightly fewer than 2,400 retail stations offering E85. That’s not because “Big Oil” is preventing the sale of the product – more than half of the stations where E85 is offered are stations that are branded by a refiner – it’s the lack of consumer demand.
The majority of service stations are owned by independent businesses, not major oil companies, and installing E85 fueling infrastructure that can cost thousands of dollars to hundreds of thousands of dollars per station most often can’t be justified. With weak demand for E85 and high investment costs, offering that product would add an economic burden for businesses already facing difficult challenges.
DOE’s goal was to reduce emissions associated with conventional gasoline, but instead it spent a significant amount of money on an initiative that produced little to no benefit, the IG found. E85’s poor market acceptance over the past 30 years simply can’t be ignored when implementing policy.
We also can’t ignore problems with the fuel itself. A recent Q&A by the Associated Press described ethanol’s lifecycle process, highlighting ecological problems from increased fertilizer use, the plowing over of grassland and other areas set aside for conservation, the pollution of drinking water from fertilizer and the release of carbon dioxide when grassland is plowed for corn crops. In addition there are food-for-fuel concerns. When considering ethanol as a way to reduce emissions, you also have to evaluate the fuel’s lifecycle impacts and the unintended consequences of its production.
The ethanol lobby frequently cites increased use of E85 as a way for refiners to meet RFS mandates for increased ethanol use. It’s clear from the DOE experience that this isn’t feasible, effective or realistic. E85 faces major challenges, and simply calling for increased use of E85 isn’t a credible remedy for the RFS’ broken mandates.
ABOUT THE AUTHOR
Bob Greco is group director of downstream and industry operations at the American Petroleum Institute. With 21 years of experience, Bob directs activities related to refining, pipeline, marketing, and fuels issues. He has managed exploration and production activities, policy analysis, climate change issues, marine transportation, refining, gasoline and jet fuel production issues and Clean Air Act implementation efforts. Before coming to API, Bob was an environmental engineer with the U.S. Environmental Protection Agency, with expertise in automotive emission control technologies. He has a M.S. degree in environmental engineering from Cornell University and a B.A. in biology from Colgate University.