Even With the Volt: GM Remains Committed to Ethanol

By John O'Dell February 16, 2010

Company Sees Cellulosic Rather Than Corn-Based As Answer; Acknowledges Obstacles

flex350.jpgBy Dale Buss, Contributor

The Chevrolet Volt will be available in a version that runs on ethanol-heavy E85 fuel within a year of the 2011 introduction of General Motors' highly anticipated plug-in hybrid, according to Tom Stephens, vice chairman of GM's global product unit.

The decision to make an ethanol-powered Volt underscores GM's still-growing commitment to an alternative fuel whose long-term viability has come under increasing attack over the last few years.

In fact, while the company's flex-fuel rollout plan initially focused on more traditional port fuel-injected engines, by next year GM also will provide flex-fuel versions of the direct-injected powertrains on recent models including the Chevrolet Equinox and GMC Terrain crossovers.

The soon-to-debut Buick Regal and Chevrolet Cruze each will offer flex-fuel engines shortly after they hit the market: with ethanol-capable naturally aspirated and turbocharged direct-injection engines for the Regal and a downsized turbocharged engine in the compact Cruze.

GM has determined that more than half of its 2012 production in the U.S. market will have E85 flex-fuel vehicles capable of running on gasoline of a mix of gasoline and up to 85 percent ethanol. The automaker already is responsible for more than four million of the total of 7.5 million E85 vehicles on American roads.

"We feel that ethanol is the best near-term solution to displace petroleum," Stephens said, speaking Tuesday morning before the opening of a big biofuels conference in Orlando.

He noted that GM also continues its heavy backing of two startups that are attempting to commercialize cellulosic ethanol as well as its support of university research into this so-called "second-generation" ethanol that doesn't rely on corn as the feedstock.

Pushing Back

Critics have scored conventional ethanol for a number or reasons: How the corn grown for the fuel competes with food crops for arable land, especially in the United States; ethanol's contribution to increasing global levels of C02 when the entire production and manufacturing cycle is considered; its cost; its lack of energy density compared with gasoline; the paucity of E85 pumps at filling stations around the country; and because the powertrains in most of the existing fleet of non-E85 vehicles on American roads would be ruined by even a moderate increase in the slight proportion of ethanol that already is allowed in gasoline.

Stephens and other GM executives on Tuesday pushed back against that criticism - being careful to point out that GNM sees ethanol's future in the so-called second generation , or cellulosic from of the fuel made from woody plants, wood chips, waste paper and other materials that are well outside the food chain,.

"Clearly we don't want to abandon" ethanol, Coleman Jones, GM's biofuels implementation manager, said during a conference call with reporters. "To get where we want to go, it'll be [based on] cellulosic ethanol or something beyond corn. We'll have more ethanol and [prices] should be more competitive relative to petroleum."

In some ways, of course, America needs GM to keep pushing ethanol as much as GM needs U.S. consumers to grow more accepting of it. There's a congressional mandate for the nation to produce 15 billion gallons of ethanol by 2015, and that fuel will need to be blended with gasoline and somehow be used in our vehicles.

Two Obstacles

    The GM executives said that the auto industry and the federal government together must address two of the biggest obstacles to more widespread adoption of ethanol as a transportation fuel.

The first is that there are only about 2,200 E85 fuel pumps across the entire country, about two-thirds of them concentrated in just 10 states, mostly in the Midwest. Yet only 19 percent of the flex-fuel vehicles now on the road are garaged in those states.

"For many flex-fuel vehicles, there are no flex-fuel pumps in their zip code or even in their county," Stephens said. "We have to fix that."

GM has been helping gasoline retailers add hundreds of flex-fuel pumps, but there are 160,000 filling stations across the U.S.

The industry needs about 12,000 E85 pumps "to have ethanol fuel available to every customer within about two miles of them," Stephens said. "So we've got some work to do there."

The other challenge is that ethanol producers are pushing the federal government to sanction "mid-level" blends that would contain as much as 15 percent or even 20 percent ethanol in a gallon of gasoline and would fuel regular powertrains - not the special E85 engines that are capable of running on as much as 85 percent ethanol.

For some time, the standard has called for as much as only 10 percent ethanol in standard gasoline.

To accommodate mid-level percentages of ethanol, automakers would have to "harden" many powertrain components against the greater corrosive properties of ethanol and its other differences compared with gasoline alone.

However, the issue "isn't setting some new design standards by which certain date we would have to be E15 or E20 capable," said Mark Maher, GM's executive director of powertrain vehicle integration.

"The issue is a retroactivity issue," he said - a question of how many of the 255 million existing vehicles on the road today could run safely on higher-ethanol fuel.

What's Going for Ethanol

    The appeal of ethanol, of course, largely has been that it is a substitute for gasoline, much of which comes from imported oil.

But the GM executives noted that it also holds some substantial environmental benefits, among them the fact that corn ethanol produces 21 percent fewer carbon-dioxide emissions than gasoline at the tailpipe (most environmentalists believe the entire ethanol production chain - including clearing land for the crops, fertilizing and harvesting them, transporting them to ethanol plants and breaking down the starches and fibers into alcohol is more CO2-intensive than producing and refining crude oil).

For cellulosic ethanol, the figure is 110 percent less after giving production of cellulosic ethanol credit for co-generating bio-electricity, according to a recent analysis by the U.S. Environmental Protection Agency.

What's more, the executives pointed out, corn prices have continued a long-term decline relative to gasoline prices even as ethanol production has boosted demand for corn as a feedstock. They noted that corn yields are still climbing strongly. And of the 4.4 pounds of waste produced daily by each American, only 10 percent is recycled - leaving vast quantities of potential raw material for cellulosic-ethanol production.

Stephens said that GM's two cellulosic-ethanol partners, Coskata and Mascoma, are still predicting production costs of around $1 to $1.30 a gallon once their commercial-scale facilities are running within the next few years.

But he acknowledged that, at least in the short term, the retail economics of ethanol are problematic. "The real thing that drives consumers is simply economics," he said. "What we need to do is change the economics of ethanol so it's more cost-effective."

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