Using ethanol-based fuel: Will it save you money? - Auto Resources Guide Bob Hurley Ford

We've often heard leaders in the news say that we should lower our dependence on using foreign oil. One strategy is to sell gasoline mixed with ethanol (alcohol), in the form of E85. 

Domestic automakers sell flexible-fuel models with engines that can run on either straight gasoline or E85.

But what is the worthwhile motor fuel for you?

When reviewing E85 fuel (a gallon would have 15% gasoline and 85% ethanol) you have to look at the good factors: 1) it's a renewable fuel (it comes from growing corn and processing it into alcohol), 2) it uses up to 85 percent less imported petroleum, 3) by buying it it means less money goes overseas, and 4) you don't have to pay a premium for a flexible-fuel model vehicle.

The downside of using ethanol fuel is 1) the fuel economy suffers as you get fewer miles per gallon than regular (100 percent) gas, 2) and the environmental benefits are unclear.

E85 fuel isn't sold in all areas. On a national level, E85 is hardly widespread. The highest concentration of filling stations is in corn-growing states such as Illinois, which has almost 150 of the nation's more than 900 outlets, according to the U.S. Department of Energy.  Minnesota has the most, with roughly 300.  Availability is poorest in the South and the Northeast.  In the southern midwestern states it's more common to have gasoline sold with gasoline mixed with 10 to 15% ethanol.  The number of filling stations in the U.S. is expected to increase over time.

The gasoline in E85 ensures that the engine starts in cold weather, because straight alcohol won't. The ethanol in E85 comes from corn; most of the kernel is still available for use in traditional products such as animal feed.

The question is . . . can your vehicle burn E85?  If it's a flexible-fuel vehicle, it can.  Millions of such models have been sold over the past decade.  If you were unaware, you're not alone.  A recent GM study found that roughly 70 percent of its flex-fuel vehicle owners didn't know they could use E85, and fewer than 10 percent did so. This contributed to GM's decision to launch its "livegreengoyellow" media blitz.

A flex-fuel model can burn any combination of E85 and straight gasoline, so owners can fill up with either fuel at any time.  Technically, a non-flex fuel model can be modified to run on E85, but it is far from being cost-effective.

The most often asked question is . . . will using E85 save money?  At its current price per gallon, E85 doesn't save you money, and it might cost you more.  E85 typically sells for 10 to 30 cents less per gallon than gasoline, depending on your region. However, E85 produces 72 percent as much energy per gallon as gasoline, so you burn more of it per mile.

For example, the flex-fuel vehicle equipped with a 3.5-liter V-6 engine might get an EPA-estimated 23/31 mpg (city/highway) on gasoline and 16/21 mpg when burning E85.  The acceleration is pretty much the same, but the car's range is shortened.  In other words, you'll be filling the tank more often when using E85.

Do the math and you'll discover that E85 must be priced roughly 28 percent less than gas just to break even.  For example, if gasoline is $3 per gallon, E85 would have to be priced below $2.16 per gallon.

In another example, let's say you have a vehicle getting an average 27 miles per gallon.  Using 100 percent gasoline, and if you drive 15,000 miles per year, it would cost you about $1,944 in gasoline every year.  You would be buying 556 gallons to go that distance. If you used gasoline mixed with 15% ethanol, you would buy 694 gallons to go the same distance.  At $3.50 per gallon it would cost you almost $41 more per month to drive with the gasoline/ethanol mix.  If you drove with E85 fuel, it would require 811 gallons to go 15,000 miles and cost you $75 more per month (compared to 100 percent gasoline).

The best reasons to buy an E85 vehicle are to decrease U.S. dependence on petroleum — which is non-renewable and comes mainly from foreign countries — and to keep more of your money in this country.

E85 also has environmental benefits, although the degree is in question.  A flex-fuel car burning E85 has different levels of tailpipe pollutants, but it's not dramatically better overall than gasoline exhaust.  Separate from true pollution emissions, E85's output of carbon dioxide — a greenhouse gas — is again comparable to that of gasoline, at the car's tailpipe.  The theoretical benefit is that the carbon in ethanol comes from corn plants, which, in a sense, recycle the carbon.

In comparison, petroleum is carbon that was trapped underground for millions of years before being released into the ecosystem. The National Ethanol Vehicle Coalition (NEVC) says E85 reduces CO2 by about 36 - 42 percent versus gas.  Still, scientists point out that petroleum is used to plant, fertilize, harvest, process and transport E85.

Ethanol prices are already subsidized in some states.  Buyers in Illinois pay no sales tax, which brings down the posted price per gallon

(tax is included in per-gallon prices for straight gasoline, not added on top of the total). Price hinges on supply and demand and economies of scale.  Demand recently jumped when the additive MTBE was found to be polluting groundwater.  States that used MTBE are switching to ethanol as an octane booster and oxygenate, which reduces summertime air pollution from gasoline evaporation.

Ethanol proponents say an oft-cited study that claimed ethanol takes more energy to produce than it gives back is no longer accurate.  According to NEVC, the overall energy advantage over gasoline is 3 to 1. This ratio is expected to reach 9 to 1 when the industry moves away from food crops and toward waste vegetation and/or plants that are simpler and cheaper to grow, harvest and process.  Switchgrass, is one such plant.

As alternative fuels go, biofuels like ethanol and biodiesel have great advantages in the real world.  They can be distributed and dispensed like conventional liquid fuel, and used in vehicles that cost automakers very little in terms of additional cost.  Smart consumers, may want to check with their gasoline station to see what kind of fuel they offer.  Many stations use signs that state "100 percent gasoline".

Auto makers are now building more hybrids and plug-in electric vehicles, which may force consumers to pay a higher sticker price, but have lower operating costs over the life of the vehicle.  One study suggests that to get a 100-mile range from a plug-in electric vehicle might cost about $3.  Compare that to a gasoline-powered vehicle with an average 25-miles-per-gallon rating, at $3.50 per gallon, it would cost $14 to go the same 100-mile distance.  That might equate to a savings of more than $1,600 per year in driving an electric vehicle versus a gasoline powered one.

Source: Bob Hurley Ford

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