desmoinesregister.com

Sponsored by:
The Des Moines Register
Get Register news on the go
Our mobile site | Breaking news text alerts

Ethanol producers want to link auto bailout to flex-fuel vehicles

By PHILIP BRASHER • pbrasher@dmreg.com • November 19, 2008

Washington, D.C. - Ethanol producers want to use a bailout of the auto industry to boost production of cars that can run on higher blends of the corn-based fuel.

The ethanol industry is seeking "a more specific commitment to ethanol use" from automakers, said Matt Hartwig, a spokesman for the Renewable Fuels Association.

"Certainly, if taxpayers are going to do this (bail out the auto industry) or be asked to do this, then they ought to be getting something for their investment," he said.

Advertisement

Sen. Charles Grassley, R-Ia., made a similar point in a letter to the Democratic congressional leadership last week. Any taxpayer funding for the automakers "must be accompanied by enforceable commitments to FFV production and alternative fuel use," Grassley wrote.

FFVs, or flexible-fuel vehicles, are equipped to run on a wide range of blends of ethanol and gasoline. Under federal law, conventional vehicles can legally run on no more than 10 percent ethanol.

Some ethanol producers are struggling financially after they locked in high corn prices this summer only to have prices for ethanol and grain drop sharply this fall. One major producer, VeraSun Energy, is reorganizing under bankruptcy protection.

General Motors, Ford and Chrysler are increasing their production of cars and trucks that can run on as much as 85 percent ethanol, or E85. But ethanol producers fear there won't be enough of those vehicles on the road to consume all of the biofuel that is going to be produced in coming years under the government's usage mandates.

Automakers also have resisted the ethanol industry's efforts to ease the 10 percent limit on the amount of ethanol used in conventional gasoline.

The automakers' current timetable is to make half of their new vehicles E85-capable by 2012. Even that target is contingent on there being sufficient E85 pumps and other infrastructure to serve those vehicles.

"We do not favor mandates in general. With 1 percent of stations offering E85, a lot more needs to be done" to have sufficient infrastructure, said Alan Adler, a GM spokesman.

Sen. Tom Harkin, D-Ia., has sponsored legislation to boost production of E85 vehicles and also supports linking that to an auto industry bailout.

"Any aid that is provided must maximize the likelihood that the taxpayers are paid back, require an emphasis on developing alternative vehicles, such as flex-fuel, hybrids and electric cars, and require firm limits on executive salaries and an elimination of dividends," Harkin said.

The ethanol industry's push to get in on an automakers' bailout comes as biofuel producers are fighting off efforts by food makers, environmental groups and others to roll back ethanol incentives.

Joel Brandenberger, president of the National Turkey Federation, said the government's ethanol usage mandate should be rewritten so that the annual targets are automatically waived when grain supplies are excessively tight. The livestock industry "dodged a bullet" this year when floods delayed planting for corn and soybean crops, he said.

Ethanol industry officials say they still need federal incentives to stay economically viable and to develop new forms of biofuels from nongrain feedstocks such as crop residue, wood and other sources of plant cellulose.

"Cellulosic ethanol is going to happen through a financially successful corn-based, starch-based ethanol industry," said Bruce Rastetter, chief executive of Hawkeye Energy Holdings of Ames.

In your voice

Read reactions to this story


most viewed stories

Advertisement

latest blog posts

By SophiaAhmad:
From: Des Moines Register
1/7/2009 10:30 AM CST
By MichaelMorain:
From: Des Moines Register
1/7/2009 10:01 AM CST
By DT:
From: Des Moines Register
1/7/2009 9:47 AM CST

News on your cellphone

Powered by 4INFO. Standard Messaging Rates or other charges apply. To Opt-out text STOP to 4INFO (44636). For more information text HELP to 4INFO (44636). Contact your carrier for more details.

inside desmoinesregister.com

The best photos of 2008
from Des Moines Register
photographers.

View hundreds of photos
from New Year's Eve 2008
at DesMoines.Metromix.com

The Datebook Diners talk
about the best places and
meals they ate in 2008.

Looking for stories or photos
from the past two months?
Use our 60-day free archive.

Complete coverage of the 2008
Outback Bowl between Iowa
and South Carolina in Tampa