Spread in Gas, E85 Prices Benefit Makers of Flex-Fuel Vehicles, but Not Necessarily Their Owners
By Scott Doggett June 1, 2009
Gasoline prices have been creeping up since about the start of the year, and that's a good thing if you're in the ethanol business.
According to the American Automobile Association, the nationwide average price of gasoline today is $2.51 a gallon, or about 50 cents a gallon more than it was only four months ago.
But according to E85Prices.com, the nationwide average price for a gallon of E85 (85 percent ethanol, 15 percent gasoline) is $2.02 a gallon today.
Or put another way, gasoline now costs 19.4 percent more than E85, the most common of the various ethanol mixes.
So, this is a good time to own a flex-fuel vehicle, right? Not necessarily, because what most people don't realize is that ethanol is 10-25 percent less efficient than gasoline.
If your flex-fuel-accepting engine is more than 19.4 percent less efficient when you've got ethanol in your tank, you'd be better off filling it with gasoline.
We're pointing this out because a number of blogs are making a big deal about the current gasoline-ethanol price spread without mentioning the significant efficiency difference that exists between the two fuels.
Unfortunately, the automakers that produce flex-fuel vehicles don't say which of them are more (or less) efficient in their use of ethanol. Rather, the owners of flex-fuel vehicles are left to figure it out for themselves.
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I work in biofuels at GM and no one is hiding anything when it comes to the energy difference between ethanol and gasoline pricing. The mpg difference is typically 20-25 percent less for E85, but every vehicle is a little different and driving habits have an impact on fuel efficiency. Ethanol itself has higher octane and burns hotter than gasoline, but it does have fewer British Thermal Units (BTUs) than gasoline but other benefits including reduced greenhouse gas emissions and the fact that it comes from renewable sources. Ethanol is doing more today to curb demand for petroleum than any other technology. And we think for the near term, this will continue. Pricing should always be a consideration -- and we know it is -- when filling up. As gasoline prices rise, ethanol should become a better deal. But with nearly 4 million flex-fuel vehicles on the road, we think it is important for owners to have a choice in fuels - beyond regular and premium.
One correction to my above post. E85 runs cooler, not hotter than gasoline. As to disclosure, every new vehicle comes with a hang tag that gives the expected difference in mileage between gasoline and E85. An actual cost calculator is available on the EPA's website - http://www.afdc.energy.gov/afdc/progs/cost_anal.php?0/E85/
i just don't think it's right that flex fuel vehicles count as being 20% more efficient when they are sold and factored into the manufacturer's CAFE score. especially since most owners will fuel them with petrol simply due to the convenience and perceived economy (fewer stops to refuel). this entry about keeping the savings in perspective relative to E85's decreased economy means that you'll have to burn more food to cover 100 miles than you would for dead dinosaurs. in the end you use more fuel than you would with petrol but it counts as being better for the CAFE and environment. flawed logic by the government.
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