E85 Not Selling Well Even In The Heart Of The Corn Belt - DMR

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Washington, D.C. - Ethanol producers are lobbying Congress for incentives to get consumers to fill up on higher blends of the biofuel. But the relatively slow sales of E85 even in the Midwest show motorists whose vehicles can use ethanol often don't buy it, critics say.

E85, a blend of 85 percent ethanol and 15 percent gasoline, was seen as a promising way for the industry to boost its market share. But the fuel is supposed to be burned only in cars or trucks especially equipped to run on ethanol, and most of those vehicles on average use just a few tankfuls a year in states such as Iowa and Minnesota where the fuel is the most available. "Even in states where E85 pumps are concentrated, actual sales of E85 have been stagnant," Shane Karr, a lobbyist for the auto industry, told a Senate committee this month.

Cars and trucks get significantly poorer mileage when using E85 - about 25 to 30 percent less, according to the government - so sales typically fluctuate according to swings in gasoline and ethanol prices. The bigger the price spread between gasoline and E85, the more likely motorists will opt for E85. When the spread narrows, E85 sales drop. "It's hard to get any consistency in E85 sales," said Rick Cummings, vice president of CHS Inc., which sells E85 through 290 Cenex dealers in the upper Midwest.

Automakers are fighting legislation sponsored by Sen. Tom Harkin, D-Ia., and others that would require all automakers to ramp up the production of ethanol-capable, "flexible-fuel" vehicles. Only 8.2 million of the 250 million vehicles now on the road can run on higher grades of ethanol, and they are mostly Chrysler, General Motors and Ford products. The number of ethanol vehicles increases about 10 percent a year.

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