Corn power – Coming soon to a pump near you
By Steve Jagler, SBT Executive Editor
You pull into a gas station and begin refueling your vehicle. However, you’re not pumping regular gasoline into your tank. Instead, you’re pumping in a new kind of fuel, 85% of which was produced from Wisconsin corn, and only 15% of which is actual gasoline. Furthermore, the corn-based fuel is much cheaper than regular gasoline.
What would be the aftermath of your decision? For starters, aside from paying less at the pump, your vehicle would emit less pollution, resulting in cleaner air. America’s reliance on foreign oil would be reduced. And Wisconsin’s corn growers would benefit economically from a new use for their renewable product, while green space would suddenly become more valuable real estate.
In a limited way, all of that is happening right now, although a cynical American public remains either unaware or skeptical about the feasibility of E85, the new alternative fuel that is 85% ethanol.
However, if you haven’t heard of E85, you will soon. That’s because some big players are stepping up to support the new fuel that will burn cleaner and reduce America’s dependence on foreign oil.
Those players include President George W. Bush, the Big Three automobile manufacturers, the governors of several states and a wide coalition of advocacy groups, ranging from farmers to universities.
Much to the surprise of many environmentalists, Bush, whose family made fortunes in the oil industry, is actually leading the way in this corn evolution.
"I think what President Bush is doing is reflecting the nation now. We need to be more energy conscious now," said Robert Oleson, executive director of the Wisconsin Corn Growers Association in Palmyra. "I really think everyone is starting to sing out of the same hymnal now."
Bush’s 2003 Energy Bill includes the Volumetric Ethanol Excise Tax Credit (VEETC) Act of 2003.
If approved by Congress, the Energy Bill would create incentives for gas station owners to sell E85. The owners would receive a tax break of 30 cents per gallon of E85 sold in 2004, 40 cents in 2005 and 50 cents in 2006.
Further, gas station owners would receive tax breaks of about $30,000 to help defray the costs of installing E85 pumps, said Maria Boardman, program coordinator of the Alternative Fuels Task Force, a partnership of the state, the University of Wisconsin-Milwaukee’s Center for Alternative Fuels and Bulk Petroleum Corp. of Milwaukee.
The Senate passed its version of Bush’s Energy Bill July 31. The House previously passed a different version. The two branches are debating their respective versions in a conference committee.
The tax incentives to retailers would be critical to the growth of E85, according to Michelle Saab, spokeswoman for the National Ethanol Vehicle Coalition, a Jefferson City, Mo.-based advocacy organization.
"If somebody sees a price of fuel at $1.15 per gallon, as opposed to $1.85, he or she is going to want to use that fuel," Saab said.
Since the alternative fuel campaign began in earnest last year, nine gas stations in Wisconsin have installed E85 pumps, including five in the city of Milwaukee, one in Janesville, one in Tomah and two in Madison.
By the end of the year, four additional E85 pump locations will be opened in the state, including three in southeastern Wisconsin.
The Alternative Fuels Task Force will apply in 2004 for federal grants to help develop more E85 stations in Eau Claire, Monroe, Appleton and Oshkosh, Boardman said.
"They’re progressing rapidly. We’ve opened about 40 stations in the last year. More and more stations are opening every day, as people understand," Saab said.
The Citgo station at 2426 N. Farwell Ave. in Milwaukee sells about 200 gallons of E85 fuel per week, according to station manager Balvinder Singh.
That sales volume is on the verge of increasing significantly, he said, because owners of the General Motors flexible fuel vehicles (FFVs) that can run on E85 recently received $40 debit cards from the automaker as incentives to try the new fuel, Singh said.
The debit cards are part of GM’s "I Fuel Good" campaign to promote the use of E85.
"It’s starting to pick up, now that those $40 cards went out," said Singh, a native of India. "People are bringing those cards in and filling up. They’re giving it a try."
Since 1996, GM, Ford and Chrysler have manufactured more than 1.6 million FFVs that can burn either regular gasoline or E85. About 15,000 of those vehicles are in Wisconsin.
Unfortunately, many of the owners of the FFVs aren’t aware that their vehicles even have the capability to run on E85, Saab said.
Saab admits that the buying public may be initially cynical about an alternative fuel.
"Those type of people are probably the ones that have those vehicles and don’t even know about it," Saab said. "But especially since 9-11, people are becoming interested."
GM is hopeful the debit cards will increase awareness among motorists who aren’t even aware their vehicles can be powered by E85, according to Rebecca Harris, spokeswoman for the automaker.
"All of the trucks and sports utility vehicles are basically capable (of running on E85)," Harris said.
Gas station owners such as Singh are interested because the price of E85 is cheaper than regular gas and would continue to drop if Congress approves the Bush Energy Bill.
Singh recently was selling his E85 for $1.64.9 per gallon, while his regular gasoline was selling for $1.79.9.
The E85 movement is picking up steam in Wisconsin. Gov. Jim Doyle attended a July 16 ceremony in Janesville to kick off a six-state joint initiative to promote greater use of the fuel.
Doyle was joined by officials from the NEVC and General Motors.
"Wisconsin is honored to be the site for the kickoff of this regional campaign to encourage consumers to use renewable fuel," Doyle said. "It helps farmers, cleans up the air and is good for economic development. It also reduces our state and national dependence on imported oil."
The one historical argument against the mass-use of ethanol was that the energy consumed to generate a gallon of ethanol exceeded the energy generated by the fuel.
That argument is flawed and outdated, according to Boardman.
"That was based on a study done in the 1970s. The technology has advanced since the ’70s," Boardman said.
"The (federal government) has put out a study that debunks that theory," said David Crass, coordinator of Michael Best & Friedrich’s agribusiness special practice group in Madison.
The US Department of Agriculture recently issued "Estimating the Net Energy Balance of Corn Ethanol," a special report, which hailed the energy production ratio of ethanol.
"We conclude that the net energy value of corn ethanol has become positive in recent years due to technological advances in ethanol conversion and increased efficiency in farm production. We show that corn ethanol is energy efficient …," the report stated.
Ethanol production plants have been built in Monroe, Stanley and Algoma, and at least five more production sites are in various stages of development in Wisconsin, Crass said.
Aside from the environmental benefits, other economic and social factors are converging to fuel the growth of the E85 market, according to proponents.
"The last time I looked at our state budget situation, we could use some economic activity and jobs and revenue," Crass said.
"With this GM (discount) card and the war in Iraq and all our worldly concerns – they’re causing people to look around and say, ‘What can I do?’" Boardman said.
"You can make $3 of ethanol out of a bushel of corn. It’s a win-win for everybody. I know that’s a cliché, but it really is," Oleson said.
"It’s not just for the clean air. It’s for reducing America’s dependence on foreign oil," Saab said.
Sept. 5, 2003 Small Business Times,Milwaukee