E85 Fuel Sales Rebounding, Despite Fading Subsidies

ANOKA, Minn. (WCCO) — At a dealership lined by rows of flashy new cars and trucks, the sales staff at Main Motor in Anoka is good at answering questions about flex fuel vehicles and burning E85.

Jeremy McFarland, the dealership’s sales manager, says people ask him about E85 because at the pumps it’s marked anywhere from 20 to 60 cents less.

Since the alternative fuel was introduced in 1997, Minnesotan’s appetite for E85 has grown steadily. In 2008 it hit a peak when more than 22.5 million gallons were pumped into cars and trucks.

Sales slipped during the recession years of 2009-10, but they appear to be coming back.

The commerce department just released sales for 2011, which show that we burned another 19.8 million gallons of E85. Some of that went into Sandra Kilby’s Chevy Tahoe, and she feels pretty good about saving on money.

“Yes, anything I can save I feel better about,” she said. “Nowadays with the economy the way it is.”

But as government subsidies for ethanol production dry up, the savings advantage over regular gasoline is shrinking. What had long been a 60-cent spread was more like 30-cents recently at a Bobby and Steve’s filling station in Minneapolis.

That savings may no longer offset E85’s inefficiencies. It’s no mystery that ethanol delivers less energy per gallon than burning the same gallon of gasoline. Fuel mileage is noticeably less, anywhere from 15 to 20 percent.

Even at that, the American Lung Association of Minnesota, a major proponent of E85, says the decision to burn the fuel comes down to more than just cost.

“Don’t let the perfect get in the way of better. There’s no doubt E85 is better than gasoline when it comes to tailpipe emissions,” says the Lung Association’s Bob Moffitt.

With America’s big three automakers offering 51 models of flex fuel vehicles this year, there are sure to be more of them rolling down the highways. Consumers who are motivated both by trimming pollution and cutting cost likely be behind the wheels.

“It’s going to be here. The future of E85 is here to stay, I know that much,” McFarland said.

More from Bill Hudson
  • Jimmy
  • Swamp Rat

    Too bad the car makers aren’t making cars that can adjusting to various alternative bio/syn fuels that can be made more cheaply than just ethanol based fuels. The science is there as well as the technologies. Where is that American ingenuity to produce these fuels?

    • Sam

      Too bad the car makers aren’t making cars can be powered with wishes and fairy dust.

      The technology is NOT there. Fossil fuels are the most efficient by far. But it will change…maybe 150 years in the future.

      • Swamp Rat

        Sorry chum, but the science and technologies DO exist for alternative fuels. It’s a matter of getting them mass produced in quantities that are reasonably marketable.

        Just look at Willy Nelson’s motor home road coach; it runs on vegetable Diesel type fuel. Just look at a recent cross-country SUV van trip by some MIT students who ran on bio/syn fuels from a variety of sources. Most of their fuels were made wastes from McD’s, B-K, TGIF, and even liquefied land-fill methane gases. Before I forget, Virgin Airlines in concert with GE and Rolls-Royce[a/c turbines] is using aviation bio-Diesel jet fuel in test runs with passengers. Quantas and JAL are following suit.

        Already, the Europeans, especially the Germans, have developed high performance autobahn grade auto engines that run on alternative fuels that use a variety fuel sources. These engines, including high performance Diesels, far surpass American EPA standards.

        I almost forgot, one German Diesel engine using these alternative fuels gets 40-45 mpg at autobahn speeds! In early 2011, two different Jeep vehicles, a Compass and a Patriot, with tweaked adjusted Diesel engines and sealed fuel tanks left London to Berlin. Observing all vehicular laws, two passengers per vehicle with accompanying luggage, and going non-stop except for personal pit stops/meals drove directly through Europe to Berlin. Upon arrival in Berlin, it found that both vehicles accomplished 62-68 mpg and still had fuel left to travel well into Poland!

        Sam, the tech does exist as well as the equipment. Alternative fuels are the future and probably cut our dependence on imported oil. All it takes is vision and ingenuity to succeed.

        The original Diesels engines[1890s] by Otto Diesel ran on peanut or soya oils based on research from an Iowa scientist named George Washington Carver. Henry Ford’s original Tin Lizzy engines ran on an bio-ethanol blend. However, at the time petrol fuels were cheaper and more easily refined. History it seems is reversing itself here.

        So you see the vehicles I am talking about do run on alternative bio/syn fuels not “wishes and fairy dust”!!!

        • John Frykman

          I got news for you…ethanol IS being mass produced and has been (with a subsidy from you and me) for many years in modern plants. The technology IS there…it just doesn’t make any sense to anyone with a brain. It takes more energy to produce ethanol than it contains. It also diverts corn, a feed stock and food, from the food supply and this has nearly doubled the cost of the mainstay of many people in poor countries. It cannot be shipped by pipeline, so guess what? It is delivered by diesel powered tanker trucks. It is certainly possible to produce nearly zero emission vehicles as the gasoline powered PZEV vehicles made by Volkswagen do..and they cost no more than non-PZEV vehicles.

          These decisions are not made by scientists, but by politicians. I’ll tell you who LIKES government subsidized ethanal…the farm lobby!

      • RIII

        Too bad car makers aren’t making cars that can be fueled with the worthless politations that are wasting our hard earned tax dollars subsudising stupidity.

  • GN

    Corn based ethanol, another government scam to fleece uninformed taxpayers.
    First of all corn based ethananol consumes more energy than it produces, a lot more in diesel, gas, coal, and hydro-electric power. It is a major emitter of nitrogen oxide, a very nasty pollutant. It consumes massive amounts of ground water which is being depleted at an alarming rate. Many of the wells, rural and cities are going dry requiring millions of dollars spent to dig wells deeper and deeper hoping to find safe water. All should know that corn has tripled in price because of ethanol which goes right to the cost of food on the table for the folks just trying to make ends meet. Add that to the massive corn subsidies to farmers, taxpayer funded of course, then add the army of government employees that administer these worthless programs and you’ll find that this so called great product cost around $15.00 per gallon. Use your head folks. Every gallon you consume means you pay through the nose in true cost.

  • Bob Moffitt

    Let’s clear up some points made by earlier commenters. First, to Swamp Rat, Minnesota is also a leader in use and manufacture of some of the biofuels you mentioned, particularly biodiesel. All of the diesel fuel sold in the state now contains a five percent blend of biodiesel. By 2015, that percentage will increase to 20 percent.

    The U.S. Department of Energy, along with many other researchers, has concluded that ethanol delivers more energy than it takes to produce and refine. It’s a proven fact, as are the reduced tailpipe emissions from flex fuel vehicles using E85.

    While ethanol has certainly made corn a more valuable commodity to Minnesota farmers, there is no clear evidence that it plays a MAJOR role in higher food prices or is responsible in any way for hunger here or around the globe.

    Those complaining about subsidies should watch the story again and listen carefully. The federal subsidies to ethanol fuel blenders are gone, and state payments to ethanol producers are being phased out this year. Farmers do not get direct “ethanol subsidies,” and never have.

    The American Lung Association in Minnesota recognizes E85 and biodiesel as clean air choices that reduce tailpipe emissions, the single largest source of air pollution in Minnesota. Questions?

    • GN

      There is where you made a major mistake Bob, you used information printed by the government. Dig through the EPAs information database for better facts not commonly published and politically motivated and creativiely written junk Bob. Dig through university research databases. Use some common sense Bob. Learn to analyze and create economiic models Bob. I don’t know you Bob but assume you are a farmer, part of the ag lobby, or perhaps the bio-fuels lobby.

  • E85Prices

    To Bobby & Steves Station..Come on guys you have been in the Fuel Business a long time.. lets get some facts straight.

    1. Ethanol is 70 cents less per gallon than Gasoline on the Chicago Board of Trade

    2. That means your distributor is buying Ethanol for LESS than he did just 2 months ago when the VEETC was still around.

    There is NO reason at all why your E85 shouldn’t be in the 50-60 cent less range

    PLUS..E85 is taxed at 19 cents per gallon compared to 27 cents for Gasoline in Minnesota..

    So between the lower tax rate AND the FACT that Ethanol is trading for 70 cents less per gallon on the Chicago Board of Trade.. E85 should be trading for between 50-60 cents less..

    The Loss of the VEETC for blenders is pointless and it simply isn’t factual to claim that is why you are only selling E85 for 30 cents less per gallon.. maybe you need to have a talk with your distributor as to where the other 30+ cents is going

    Dan McCullough

  • additional info

    Just thought I would note….
    First, for those who use this fuel just to save money…there have been testing done where they used regular fuel in a vehicle and then used E85. You got on the average of 7 mpg LESS with E85. So by taking that into concideration you will be paying about the same for both fuels. E85 however is alot better for the enviroment..I won’t argue that point though.

  • RussellS

    I’m all for more E85 stations all over the US. For the race crowd you cannot beat it. It burns cleaner, lowers engine temperatures, has a lot cleaner emissions and is way better than burning leaded racing gasoline. It can be made from sugar, seaweed, saw grass…etc it doesn’t have to be just corn. What you have is a lot of bad mouthing coming from Big Oil that are afraid of what can be done with ethanol. I agree the price of ethanol is over inflated. True market value should be much lower. As far as cutting our depedancy on foreign oil… you have a very viable option just perfect it. It doesn’t all have to be produced from corn. There is a lot of misinformation on ethanol out there. Read up dig in and find the facts. It absolutely should be here to stay.

  • http://travel2minneapolis.us/minneapolis-news-stories-forfeb-14-2012/ Minneapolis News Stories for Feb 14 2012 : Travel tips, hotels, restaurants, jobs and news | Travel 2 Minneapolis

    […] Democrats are accusing Republicans of using state staff and equipment for political benefit.E85 Fuel Sales Rebounding, Despite Fading SubsidiesSince the alternative fuel was introduced in 1997, Minnesotan’s appetite for E85 has grown […]

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