“IT'S A domestic fuel. It's renewable. It's cleaner burning than petroleum.”
That's how Tim Morse, director of the travel management division for the State of Minnesota's Department of Administration, sums up the advantages of E85. Farmers understand those basic benefits, but they add one more to the list: E85 expands their market.
To support that expansion, you might want to run your own vehicles on E85. Perhaps you are considering converting an existing vehicle to run on E85. Or maybe you are considering buying a new flex-fuel vehicle that can run on either E85 or traditional 10% ethanol-blend unleaded gasoline. Both schemes have pros and cons, and with either approach, you may run into trouble down the road.
The big appeal of conversion is reduced up-front cost. By retrofitting an existing vehicle to run as a flex-fuel vehicle, only the cost of conversion is involved. The other advantage is that, theoretically at least, you can convert a vehicle that already meets your needs. Despite growth in the availability of new flex-fuel vehicles, it can still be difficult to spec one exactly as you want it.
The big downside of conversion is that you're asking the vehicle to do something it was never intended to do — burn a fuel that is mostly alcohol. The chemical properties of alcohol are very different from those of gasoline, and that can lead to expensive failures unless the conversion process is thorough. Every system involved in the combustion process must be adapted for exposure to alcohol. This includes fuel lines, fuel pumps, fuel injectors, oxygen sensors and exhaust after-treatment. Even the electronic engine control module must be reprogrammed to match the characteristics of ethanol.
Conversion kits are rumored to be available, but they're not the sort of thing you can pick up at NAPA. At this time, there are no vehicle-conversion companies, at least none that are legal.
Whether doing your own conversion or subbing out the work to the local garage, you are at risk of violating Memorandum 1A. In June 1974, the U.S. EPA issued Mobile Source Enforcement Memorandum 1A (Memo 1A) to enforce the tampering prohibitions under Section 203(a)(3) of the Clean Air Act.
Although Memo 1A does allow for conversion, “for a company to come to market with a conversion kit, they must go through a rigorous process,” says Tim Gerlach, director of outdoor air programs with the American Lung Association of Minnesota. “That certification process is lengthy and can be costly. The kits are subjected to high-mileage duration testing that can be very costly.”
The big appeal of buying a new flex-fuel vehicle is that it's the simplest way to start using E85 fuel. Cut a check to the dealer and you'll be handed the keys to a vehicle that runs on E85 from the start.
But will it be the right vehicle? More flex-fuel vehicles are available each year, but manufacturers tend to make only passenger vehicles and light trucks that run on E85. Of the dozen or so 2006 flex-fuel vehicles offered by the Big Three automakers, few are suitable for farm work. Dodge offers its 1500 series Ram pickup and Ford has its 5.4-liter F150. GM tops the list. Flex fuel is an option on Chevrolet and GMC pickups and SUVs with the 5.3-liter engine.
“If I were buying half-ton pickups and Chevy Tahoes, the 5.3 would probably be fine,” says Bill Roberts, director of fleet services at the University of Minnesota. “But a lot of our departments have three-quarter or one-ton pickup trucks. In the GM they want the 6-liter engine. They're not about to drop down to the 5.3 to get flex fuel.”
Morse says his location has a fleet of about 1,900 vehicles, both passenger vehicles and light trucks, of which some 1,100 are flex fuel. They've been using E85 since the early '90s. He says that, when helping department heads select vehicles, he tells them, “You need to acquire the vehicle that is suitable to the job you have at hand.” He says, “If there's a flex-fuel vehicle available, we steer them in that direction. We help them understand the benefits of having a flex-fuel vehicle and of using the [E85] fuel.”
The 1,500 vehicles that Daniel Utes manages see a variety of duty cycles. Utes, fleet service representative with the U.S. General Services Administration, says, “We have vehicles that will sit for a week or two weeks without moving. We have vehicles that get driven hundreds of miles a day. Generally, our experience with flex-fuel vehicles has been very good.”
He says Ford Tauruses were an exception. “In cold weather they either wouldn't start or were hard to start,” he says. “Finally Ford issued a technical service bulletin. They reflashed the EPROM [reprogrammed the engine computer]. But the Chevys and Dodges have all been really good.”
Roberts says his experience was different: “We haven't had a problem with the Fords, but when it gets down to 15 below or colder we've had starting problems with the Chrysler products.”
Morse's experience also was different. “I can't identify any problems unique to the flex-fuel vehicles that we haven't had with our gasoline-only vehicles,” he says.
Although those issues of hard starting may be restricted to a few vehicles on a few days of the year, a bigger issue for all flex-fuel vehicles is residual value. The amount you get for your truck when you go to sell it or trade it in has a big impact on the total cost of ownership. Poor residual value takes money right out of your pocket.
A do-it-yourself conversion to flex fuel will certainly be an anchor on residual value. The fate of factory flex-fuel vehicles is less clear. “Based on our experience at our own auctions [of used fleet vehicles] I haven't seen any difference as far as flex fuel,” Roberts says. “People aren't going to pay any more or any less for them” than they will for equivalent gas-only vehicles. “If gas got above $3.00 a gallon and E85 stayed low, I think people might start actively looking for used E85 vehicles. But I don't see that yet.”
Supply and demand
And he may not. Ethanol prices may prove to be even more volatile than gas prices. Although domestic production is increasing, demand is expected to outpace supply, resulting in higher costs. It's conceivable that E85 may cost as much as gasoline — perhaps more — in the near future. E85's 10 to 15% lower fuel economy compared to gas makes it less attractive as its price nears that for gasoline.
As typically happens in any marketplace, the prospect of profit from shortages is fueling increased production. American farmers welcome this burgeoning growth, but it may not play out quite like they hope.
Brazil has been building its ethanol production for more than 30 years. It now produces so much ethanol that its exports have dramatically increased. The 684 million gallons Brazil exported last year is a 10-fold increase over its exports of 2000. The country has the physical capacity to export 2.2 billion gallons of ethanol each year, but cost-effective means of getting ethanol onto ships is lacking. Export levels will continue to increase as its pipeline infrastructure grows to more closely match its production capacity and more ethanol flows to the coast.
But world demand is also increasing. Asia, especially Japan, is thirsty for ethanol. It's possible that ethanol production will feather the nests of capitalists for decades to come, as oil has for the past century. Those capitalists could well be America's farmers.
Despite the issues, E85 offers key advantages for America and its farmers. “[Using E85] is something people can do right now,” Gerlach says. “It's not 30 years away. You can do it today. And if people are drawn to it by the lower price, that's okay. But we hope they'll stick with it for all the other reasons. We hope they see the bigger picture in this.”
And that bigger picture, as Morse emphasizes, is that ethanol is domestic, renewable, and cleaner than gasoline. That it's an opportunity for farmers just makes it that much more appealing.