10 March 2010 21:47 [Source: ICIS news]
HOUSTON (ICIS news)--Flexible-fuel vehicles (FFVs) that can burn high blends of ethanol will out compete vehicles powered by batteries, hydrogen or natural gas due to pricing and flexibility, US auto and chemical industry executives said on Wednesday.
Flexible-fuel vehicles can burn gasoline or high blends of ethanol.
General Motors (GM) and Ford were on track with plans to make 50% of their auto fleet FFV-capable by 2012, far outpacing plans for vehicles powered by batteries, hydrogen, natural gas or other biofuels, company representatives said.
"The future has to be the most diverse portfolio you can give," said Britta Gross, manager of hydrogen and electrical infrastructure development for General Motors (GM). "When consumers are faced with escalating oil prices and an uncertain environment as to where it will top, people move like flies looking for alternative technologies.
"They want options," she added. "So when this happens, they will be able to see if ethanol is cheaper for them in their local communities."
The panellists spoke at a strategy session on the future of automobiles at the CERA Week conference in Houston. The conference is sponsored by IHS Cambridge Energy Research Associates (CERA).
GM said it remained committed to automobiles based on electric batteries and fuel cells. However, those were much more long-term-based strategies.
"[Ethanol blending] has already reduced US gasoline dependency by 4.5%," Gross said.
"There is no other near-term solution that could possibly have made that kind of impact. We won't be able to make that kind of dent with electric vehicles or hydrogen - everything else will take much more time," she said.
The trend of blending ethanol into gasoline as the primary alternative fuel source will likely hold for at least the next few decades, said Jeffrey Jacobs, vice president of Chevron's technology ventures division.
"At Chevron, we think petroleum-based transportation products will remain the dominant fuel source for the next few decades because, contrary to popular belief, there is no shortage of hydrocarbons in the world," Jacobs said.
"The only fuel competitive today with traditional hydrocarbon-based fuel is sugarcane-based ethanol, in the absence of subsidies," he added. "That's a stark reminder of the challenge that we face. Even sugarcane ethanol has limitations, with respect to the volumes it can contribute to the global fuels portfolio."
John Viera, director of sustainability and environmental policy for Ford, largely agreed, adding that diesel and biodiesel-based vehicles would likely remain a pickup-truck niche market in the US due to uncompetitive pricing for their use as passenger vehicles.
For ethanol, Gross also noted that the auto industry had to be cautious in making its push to US policymakers to allow E15 (15% ethanol, 85% gasoline) and E20 blends for domestic motor vehicles.
"We're the proponents of this, and if anybody most wants that to happen, it's us - but we have to be very careful rushing into it or there will be huge opposition to ethanol," Gross said. "Until you finish testing, it is too premature to say that we decree that E15 is a great blend.
"We just don't want anything to go wrong with this transition to biofuels," she added.
Gross said she anticipated the US Environmental Protection Agency (EPA) making a decision on E15 blends in June.
CERA Week lasts through Friday.
For more on ethanol visit ICIS chemical intelligence
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