A front page story in today’s Financial Times, “Foreign carmakers doubt Detroit’s ethanol,” report on a split of opinon within the auto industry as to which technology to pursue to reduce carbon emissions. US automakers are keenly promoting E85, which is a mixture of 85% ethanol and 15% gasoline; foreign companies are investing in diesel, electric, and hybrids.
This is a more serious issue than it might seem. Any new technology requires new infrastructure. For E85 to be viable, there will need to be enough stations offering the fuel; similarly, for diesel or electrical to succeed, there needs to be either enough of the right sort of pumps or recharging spots.
The danger, of course, is with profliferating technologies, you will see only half-successful implementation of several types of infrastructure, none becoming widespread enough to be satisfactory to a mass market (there is presumably some people who are sufficiently concerned about the environment to be willing to inconvenience themselves a bit, but the size of that cohort is unknown).
One also has to wonder if the ethanol push is another sign of Detroit’s self-destructive prefernce for expediency. Ethanol permits the continued use of internal combustion engines (although the mention of warranties in the article suggests that ethanol has uncertain effects on engines over the long term). Recall that American car manufacturers have done a particularly good job of keeping our fuel efficiency requirements considerably below those of most of the rest of the world. The result? US cars don’t sell overseas. The industry’s lobbying success has damaged its market position by permitting the big three to be technology laggards.
And, of course, there is the cynical appeal of buying American corn to help the environment. And that might have an indirect benefit. Making corn expensive will also make high fructose corn syrup, beef, and other corn-fed meats more costly. Ethanol might actually give us the unhealthy food tax that some people have joked about but no one would dare implement.
From the Financial Times:
Asian and European carmakers in the US have expressed doubts about their Detroit-based rivals’ aggressive push to use ethanol instead of imported oil.
General Motors, Ford Motor and DaimlerChrysler’s Chrysler division are in the forefront of a campaign for wider acceptance of E85, a mixture of 85 per cent ethanol and 15 per cent petrol. They have already put several million “flex-fuel” vehicles capable of running on either E85 or petrol on the road.
But Mike Stanton, president of the Association of International Automobile Manufacturers, said that his members were “skittish” about E85. “We have not endorsed it as fully as the domestic companies have,” Mr Stanton said in an interview. The association’s members include the three major Japanese carmakers – Toyota, Honda and Nissan – as well as Renault of France and several other European manufacturers.
E85’s proponents see ethanol, made from corn and other vegetable material, as a quick way of reducing oil imports. The federal government has thrown its weight behind ethanol with a 51 cent-per-gallon subsidy.
On the other hand, critics blame the E85 drive for pushing up food prices, and point to significant obstacles to wider acceptance. For instance, only 1,100 out of 170,000 US filling stations sell E85.
Oil companies have so far been reluctant to promote E85, and questions have been raised about the impact of ethanol on vehicle warranties. With consumers yet to show a clear-cut preference for any alternative-fuel technology, both domestic and foreign carmakers have hesitated to put all their eggs in one basket.
Several foreign carmakers produce E85 vehicles, or have plans to do so. But Mr Stanton said these initiatives were largely based on a fear that “we’ve got a train in front of us”.
A Nissan official added that even though his company’s Armada sport-utility vehicle and Titan pick-up truck can run on E85, “we are more enthusiastic about diesel and electric”.
Several European carmakers, notably Volkswagen, DaimlerChrysler’s Mercedes division and BMW, plan to launch new “clean” diesel models in the US over the next year or two in the hope of overcoming Americans’ long aversion to diesel.
The Detroit-based companies are conducting research into electric vehicles, hybrid petrol-electric vehicles and fuel-cells, but have given most prominence to E85, especially in farm states where loyalty to their vehicles remains strong.
Ford sent letters to 29,000 owners of its flex-fuel vehicles in Missouri last month helping them to locate E85 stations. GM has agreed to promote 40 E85 stations to be built this year in Colorado.
