NEW YORK, N.Y. (Reuters) — U.S. corn producers may have found two unlikely allies in their decade-long battle with big oil to get ethanol into the nation’s fuel stream: automobile manufacturers and American drivers.
The auto industry’s slow, somewhat grudging acceptance of government policy on renewable fuel and bumper car sales will ultimately challenge the petroleum industry’s concept of a blend wall — a 10 percent saturation point for ethanol in motor fuel if there is no overhaul in vehicles and at the pump.
Analysis of vehicle sales and government data shows that almost a fifth of the vehicles on U.S. roads can safely handle E-15 fuel, which is gasoline with 15 percent ethanol content, or 50 percent more than the typical U.S. blend.
Read Also
First annual Ag in Motion Junior Cattle Show kicks off with a bang
Ag in Motion 2025 had its first annual junior cattle show on July 15. The show hosted more than 20…
That is considerably above the American Automobile Association’s 14 percent estimate from June 2015 and could climb to nearly a quarter by the end of the year if brisk auto sales continue.
At stake is the $10 billion that oil firms would lose to ethanol producers if the higher ethanol blend became the new norm in a U.S. gasoline market worth $290 billion.
Analysts say the trend marks a significant victory for ethanol makers and the entire biofuel industry.
The U.S. renewable fuel policy promoted by two presidential administrations and efforts to boost ethanol use have been subject of court battles with oil associations and automaker groups. Washington sets annual targets for the amounts of renewable fuel that should be blended with gasoline and diesel.
In 2015, most new vehicles sold were approved for E15 by manufacturers for the first time. This year, Fiat Chrysler Automobiles, which represents more than 10 percent of the U.S. market, became the last of the Detroit Three to approve the higher ethanol blend for use in its 2016 models.
A full conversion of the nation’s fleet to E15 could still take more than a decade, experts say.
However, more E15-friendly cars on the road will likely prompt gas stations to install the new pumps and storage tanks that needed to sell the fuel, removing the last major hurdle to its widespread acceptance.
“It’s a chicken and egg thing,” said John O’Dell, an independent automotive industry specialist in California’s Orange County.
“The manufacturers are starting to come around to redesigning fuel systems to handle E15, and that will slowly but surely see a growth of pumps that handle it.”
General Motors Co. and Ford Motor Co. led the move toward E15 by adopting materials capable of withstanding ethanol’s corrosiveness for model years 2012 and 2013, respectively, after the Environmental Protection Agency approved E15 in all vehicles.
The EPA has said the 15 percent ethanol blend has been safe for all vehicles since model year 2001, but that failed to dispel drivers’ concerns that they might void their warranties by filling up with the new fuel. Car makers’ quiet embrace of E15 may start to ease such fears.
The renewable fuels program, launched in 2005 is not without controversy. Ethanol provides less energy than gasoline and requires more frequent refueling, which reduces a car’s efficiency.
Environmentalists argue it is better to focus on environmentally friendly technologies like hybrid engines and fully electric vehicles.
