Levin Urges New Policies on Fuel: 07/07/06
By Sven Gustafson
The Oakland Press
SOUTHFIELD - Saying they would help lessen the nation’s dependence upon foreign oil, lower air pollution and drive down fuel prices, U.S. Sen. Carl Levin touted the need of aggressive federal policies to spur more flexible-fuel vehicles and more service stations offering E85 fuel.
Speaking Thursday at a Citgo service station that offers E85, a blend of 85-percent ethanol and 15-percent gasoline, Levin called ethanol “an alternative to gasoline that can compete with gasoline.”
“An E85 pump is a major contributor to energy independence, less CO2 and so forth,” said Levin, a Democrat.
The station was selling E85 for $2.98 a gallon Thursday, compared with $3.08 a gallon for unleaded gas. Each of the station’s other pumps offers gasoline blended with 10 percent ethanol, an amount suitable for use in any vehicle.
Ethanol is a colorless liquid distilled from agricultural products like corn used to enhance octane, lower carbon monoxide emissions and improve air quality. E85 is suitable for use only in vehicles that feature flexible-fuel tanks able to run on alcohol fuels.
“Most people that own it don’t even know that,” Levin said.
He said the federal government should do more to encourage the production and use of ethanol, partly by offering more sweeping tax credits to stations that want to install ethanol pumps and tanks.
“It would help,” said Carroll Knight, owner of the Citgo station and two pipeline terminals where ethanol is blended. “Free enterprise system - you give us the economics, it’ll be there. If you don’t give us the economics, you can’t force it down someone’s throat.
“If gasoline costs less than an ethanol-based product, you as a consumer are going to buy gasoline, you’re not going to buy ethanol.”
Already, the 2005 energy bill signed by President Bush offers tax credits of up to $30,000 to station owners who will install ethnol-blended fuel tanks. The law also calls for the gradual escalation of biofuel use in the United States from 4 billion gallons this year to 7.5 billion gallons by 2012.
Knight offers E85 at three of his roughly 40 service stations and estimates it accounts for roughly 10 percent of total sales. He said ethanol is not yet viable economically.
“Ethanol on the stock market is $5 per gallon,” Knight said, adding that adding 85 percent of it to 15 percent of gasoline should make E85 much more expensive than regular gas. “We are getting a little bit of support from one of the ethanol manufacturers on a better price on ethanol, so we can do a token amount of this.”
Knight said ethanol is in short supply, largely because of air-quality regulations in many large cities on the east coast that have boosted demand.
John DeMartini, general manager of the station, said ethanol is not offered by oil companies and cannot be advertised with an oil company logo.
“We have to blend it ourselves,” he said. “Fortunately, we’re a terminal operator so we can blend it ourselves.”
DeMartini said some ethanol users drive long distances to buy the fuel from his stations.
“I’m trying to build an E85 clientele as best I can,” he said.
Levin said some oil companies reportedly aren’t happy about a competing fuel in stations that carry their corporate logos. He said the fastest way to drive down gas prices would be for President Bush to threaten oil companies with a windfall profits tax unless they agree to lower prices. Oil companies have been roundly criticized for posting record profits amid soaring gas prices.
“He’s too close to the oil industry to do that,” Levin said of Bush.
Ethanol-compatible flex-fuel vehicles have labels posted inside the fuel doors. Flex-fuel technology was created by Ford Motor Co. during the mid-1980s but is now offered in a variety of vehicles made by Ford, General Motors and DaimlerChrysler.
According to the Department of Energy, one of eight gallons of gas sold in the United States now contains ethanol.
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