GM responds to USA Today and Rand study on diesel-hybrid-ethanol
USA Today finally noticed a study that was released by the Pardee Rand Graduate School couple of weeks ago that ranked ethanol third behind diesel and hybrids in a cost-benefit analysis. Based on the increased fuel consumption and the total life cycle costs of ethanol produced from corn, it was deemed to be the most expensive option. Given the number of flex-fuel vehicles that General Motors sells, it's no surprise that they came out with a response defending ethanol and pointing out flaws in the study. According to GM, the study didn't account for the widely varying prices of ethanol in different regions. More importantly, the study only looked at current dry milled corn ethanol rather than cellulosic ethanol. While this is a somewhat valid point, the reality is that there is no commercially available cellulosic ethanol yet.
The study was based on currently available options. As cellulosic ethanol moves into the mainstream in the coming years the equation will obviously change. However, increased availability of biodiesel from feedstocks other than soy will also influence the balance as will plug-in hybrids and hybrids with newer battery technologies. The study is only a snapshot of a point in time and five or ten years from now the picture will be different.
[Source: General Motors, USA Today]
GM Statement Regarding E85 Ethanol Cost-Benefit Analysis
Attributable to Alan Adler, manager, Biofuels Communications
The cost-benefit analysis of E85 ethanol prepared by the Pardee Rand Graduate School and cited in the Friday, Nov. 30 edition of USA Today fails to take into account several positive factors of the renewable fuel made from 85 percent ethanol and 15 percent gasoline.
E85 is not yet widely available in the United States – less than 1 percent of fueling stations offer it today – and prices vary widely. Some gasoline stations peg the price of E85 to gasoline, so when gasoline goes up or down in price, E85 rides with it. Elsewhere, especially in regions where ethanol is more widely available, the price of E85 is as much as a dollar a gallon less.
"We believe ethanol as a renewable fuel is the best near term alternative to oil as a transportation fuel and replacing gasoline with ethanol positively contributes to lowering greenhouse gas emissions," said GM Chief Economist Mustafa Mohatarem. "You cannot take a snapshot in time and define a mature market,"
When the Rand study was previewed at GM in October, the authors were told their work did not account for the significantly lower cost of second-generation ethanol that will be made from cellulosic and biomass feed stocks. Most estimates show the cost of making Gen2 ethanol at $1 or less a gallon before distribution costs.
(GM did not specifically sponsor the Rand study but does contribute $25,000 a year to Rand annually.)
General Motors is the auto industry leader in offering E85-capable vehicles with more than 2.5 million of the 6 million on the road in the U.S. For 2008, GM offers 11 FlexFuel models able to run on any combination of ethanol and gasoline up to 85 percent ethanol. GM produces about 400,000 E85-capable models a year and will double that to 800,000 a year by 2010. By 2012, GM expects to build more than 2 million FlexFuel vehicles a year.
"By 2012, it will be easier to say which GM vehicles are not E85-capable than to list which ones are FlexFuel," said Beth Lowery, GM vice president of Environment, Energy and Safety Policy. "And we are just as committed to helping build the infrastructure for E85."
Reader Comments (Page 1 of 1)
Tim 1:53PM (12/02/2007)
Did the study adjust for a scenario where ZERO tax money was used in both energy cycles? The only way for something to be self-sustaining is if it is profitable without asking the government to pick your neighbor's pocket for you.
By the way, I would venture to guess that more than 90% of the REAL cost of our addiction to oil is hidden from us in the form of war & military spending for our global empire, direct subsidies to Big "energy", increased healthcare costs due to cancer etc., loss of productivity due to illness and so on.
It's really difficult to put REAL numbers on such tangible things and much more difficult to account for the intangible such as pain & suffering.
If we weren’t addicted to oil, could we close ALL overseas bases and bring our children home to defend our boarders? If all those people came home, would we still “need” illegal foreigners who accept substandard pay & living conditions so that we could have less expensive produce?
Should we really be building and maintaining a global empire while racking up tremendous debt for our children’s children?
Isn’t that what bankrupted and finally collapsed the Soviets?
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psarhjinian 2:44PM (12/02/2007)
Just so's you know: the US imports most of it's oil from Canada and could go it alone, were it not for the want of _cheap_ oil from a guaranteed source. That so many people believe the "we're in the mideast because we're dependent on Arab oil" is a terrible fallacy that distracts from the real problem: the US needs Arab oil to maintain international economic superiority, not to sustain resource addiction. Admittedly, oil from Alberta's tar sands is hard to extract, but it's there and you don't have to worry about IEDs to get it.
You could pay a fair price (and stop funding Saudi Arabia, or propping up Iraq) by buying it at a fair price from stable countries Canada, Mexico and Venezuela. But the US economy--Democrat or Republican, it doesn't matter--is dependent, both ideologically and fiscally, on control of oil from US "client states" in the middle east.
Give that up, and you hand domination of the world economy to Europe and China.
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GreyFlcn 3:51PM (12/02/2007)
Ethanol also gets a rather bulky ammount of subsidy.
In general, take the price you see at the pump.
And then half of that is given as a subsidy towards making that fuel.
That's a third of the total cost of production is subsidized.
Even if you factor in the cost of the war into the cost of oil, Ethanol certainly gives it a run for it's money on how bloated it is.
_
"As cellulosic ethanol moves into the mainstream IN COMING YEARS the equation will obviously change."
Where the hell is that "IN COMING YEARS" coming from? It's been "coming" for over 30 years.
Last time the EIA Director spoke on the subject he mentioned he didn't expect there to be even 1% of out fuel being cellulosic by 2030.
http://i-r-squared.blogspot.com/2007/05/comments-on-senate-hearing-on-gas.html
Which also begs the question, where is all this biomass supposed to be coming from?
http://greyfalcon.net/biolimits.png
http://greyfalcon.net/algae4
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GreyFlcn 3:57PM (12/02/2007)
And since we're factoring in "total costs"
Are we also going to factor in the ecological damage caused by ethanol production into the picture?
Since it creates havoc with water resources, soil resources, driving force behind deforrestation, air quality, and Greenhouse emissions?
http://www.greencarcongress.com/2007/10/national-resear.html
http://www.energybulletin.net/28610.html
http://greyfalcon.net/soy2
iht.com/articles/2007/07/22/bloomberg/bxdead.php
greyfalcon.net/ethanol2
greyfalcon.net/n2ostudy.png
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psarhjinian 8:31PM (12/02/2007)
As long as Monsanto and Archer Daniels Midland funnel bags of cash in lobbyists and farmers, we'll keep seeing this kind of astroturfing.
Exxon et al have nothing on Monsanto or ADM in terms of Net Corporate Evil. If those two could be broken and dismembered, I think we'd see a lot of the world's problems go with them.
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Bill 8:54PM (12/02/2007)
Cellulosic ethanol will require more subsidies than corn-based ethanol.
Companies working on producing ethanol from cellulose won't ever tell you what it costs to get it.
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GMshady 7:22AM (12/03/2007)
YOu have to be kidding. Ethanol is heavily subsidized. It has no commercially viable way of being profitable. And even if there was a model it wouldn't stand a chance against plug-ins and EVs. GM just wants their co2 emission credits and to meet the Partial Zero Emission Mandate. Ethanol costs the same as gas (including the subsidized tax dollars) which really means it's really expensive in real dollars and it takes 3 times more energy to produce and it produces just as many emissions as a gallon of gas to make a gallon of E85. They put in billions to meet short term requirements that are futile and look Toyota is killing their butts. Toyota has not posted a loss since they have come to business. GM is a rollercoaster coming to an end.
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Stéphane Dumas 10:01AM (12/03/2007)
GMShady, Toyota will also offer E85 vehicules for the 2009 model year with the Sequoia and the Tundra http://www.autobloggreen.com/2007/11/15/la-2007-toyota-sequioa-to-get-flex-fuel-option-in-fall-2008/
http://www.toyotatundraforum.com/general-tundra-information/34-flexfuel-e85-available-2009-5-7l-tundras-great-article.html and other flex-fuels vehicules (even the Corolla) for the Brazilian market http://www.autobloggreen.com/2007/05/28/new-toyota-flex-fuel-vehicles-the-corolla-xli-and-the-fielder-c/
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Tim 10:05AM (12/03/2007)
Gentlemen, my point exactly! Political correctness and sound bites can kill. Only by considering the entire picture can we get our bearings correct.
We must conserve while we transition to renewable electricity as quickly as possible. I doubt that we'll ever reach 100% electricity, but we must move quickly in that direction in order to free ourselves from imported oil before our domestic sources are exhausted.
I believe Biofuel to be a distraction and not the cure. Some believe it to be a step toward electrification. If that is true, it is a costly one in both wasted time and money. Those resources could be better utilized by improving efficiencies and reducing costs regarding renewable generation, transmission, storage and utilization of renewable electricity.
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steven 1:19PM (12/03/2007)
@2: Just so you know, the US does not import "most of its oil" from Canada. Of the countries from which the US imports oil, Canada provides the largest percentage. About 18% of all oil imported into the US for CY2006 came from the Great White North.
http://tonto.eia.doe.gov/dnav/pet/pet_move_impcus_a2_nus_epc0_im0_mbbl_a.htm
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steven 1:31PM (12/03/2007)
@GMShady: Just a thought as I don't have a glass house either....So if you took your talking points and applied them to hybrids....you'd be saying that if the true costs of producing a hybrid were actually included in the cost to consumers (no, not those silly Hummer vs. Pruis costs) and the US tax credits for hybrid were removed, we'd really know that the emperor is wearing no clothes? (Pun intended.) Keep in mind Honda has admitted that it has not made a penny of profit on its hybrids. Can you provide a ref. for your statement "Toyota has not posted a loss since they have come to business"?
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J 7:57PM (12/03/2007)
Farmers sell corn for cattle feed. They can produce ethanol for ~1.15 per gal with no loss in nutrition or protein and sell the byproduct for the same amount as corn.
Why would they not produce ethanol?
Get the facts here:
http://www.ncga.com/ethanol/main/index.asp
http://www.ethanolrfa.org/resource/made/
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