Corn ethanol is dead, long live corn ethanol.
That's the message that the United States Environmental Protection Agency administrator
Lisa Jackson seemingly sent when her agency proposed allowing blends of up to
15 percent ethanol at the pump. The proposal comes just weeks after
the $5.6B USD federal subsidy for corn ethanol.
I. E15: Killing Your Autos, One Engine at a
Automakers are outraged at the proposal.
Ford Motor Company (F)
and Toyota Motor Company (TYO:7203) led the
coalition of the unwilling.
In letters to House
Select Committee for Energy Independence and Global Warming's ranking Republican member, Rep. James Sensenbrenner (Milwaukee
- Wisc.), the automakers rip the plan, which they say will likely void
vehicle owners' warranties.
While the EPA promises to use a
special orange and black label at the pumps where E15 fuel is being
vended, officials at Ford and Toyota fear that won't be enough warning for
customers. They point out that most gasoline engines aren’t designed to use
ethanol, which can cause excessive engine wear and engine failure.
Ford CEO Alan Mulally has criticized
the U.S. government's financial support of corn ethanol. Mr. Mulally indicates that he would like to see
the government instead exclusively support electrified vehicles.
Chrysler LLC also opposed the plan to allow E15 at the pump.
Writes Jody Trapasso, Chrysler external affairs SVP, "While
Chrysler has been a strong advocate of renewable fuels, we have concerns about
the potential harmful effects of E15 in engines and fuel systems that were not
designed for use of that fuel."
In response to the letters, Rep. Sensenbrenner has
fired off a letter of his own to Ms. Jackson at the EPA, warning about the
engine damage and telling her, "In difficult economic times, consumers
need to get more miles from a gallon of gas and extend the lives of their
II. EPA: Problem? What Problem?
The EPA defended the proposal claiming that
research by the U.S.
Department of Energy showed E15 to be safe to run on engines produced after
2001. They claim the DOE extensively verified "any increase would
not have an adverse impact."
The statement continues, "The administration
will continue to take steps, guided by science and the law, to reduce our
reliance on foreign oil and increase our use of home-grown fuels."
Clearly the two sides don't see eye to eye here.
The automakers, who actually engineered the cars, say E15 will destroy
engines of vehicles produced since 2001. But the EPA and DOE claim to
have secret insight that the automakers don't, arguing the vehicles will be
Besides Ford, Toyota, and Chrysler, the other
dissenting parties included Bayerische Motoren Werke AG (ETR:BMW); Daimler
AG (ETR:DAI)’s Mercedes
Benz; Honda Motor Comp., Ltd. (TYO:7267); Hyundai
Motor Comp. (SEO:005380); Kia
Motors Corp. (SEO:000270);
Mazda Motor Corp. (TYO:7261); Nissan
Motor Comp., Ltd. (TYO:7201); Volkswagen
AG (ETR:VOW); and Volvo
Car Corp., owned by China’s Zhejiang Geely Holding Group Comp.
Noticeably absent among the protesters is
General Motors Comp. (GM).
GM was the chief supporter of ethanol fuel vehicles. Most of its
lineup consists of FlexFuel vehicles, which can run on ethanol or gasoline.
The EPA may bend to the will of the industry --
after all, just weeks ago it cut the mandatory amount of ethanol in fuel blends
lowest level in three years.