GM Revs Up its Ethanol Campaign in New York
14 April 2006
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| 85 E85 Tahoes and Suburbans marshall outside Javits for the Driveaway promotional event at the New York International Auto Show. Click to enlarge. |
GM has rapidly become the most outspoken of the major automakers in its promotion of flexible-fuel vehicles that can burn ethanol blends of up to 85% as well as gasoline, and with good reason.
The ongoing increase in oil and gas prices—and, for some, concerns about energy security—are eroding the market for the full-size SUVs that are important to GM’s profitability. The automaker hopes that emphasizing the E85 capability of many of its big vehicles will give it some time to shore up its product line to adapt to the changing market conditions.
Accordingly, GM used its presence at the New York International Auto Show to drive home its messaging on flex fuel vehicles that can burn E85.
New York-area Chevrolet dealers departed from a preview of the New York auto show in an E85 Driveaway featuring 85 black all-new flex-fuel Tahoes and Suburbans.
One of GM’s two exhibit areas in the Javits exhibition hall features a “Live Green Go Yellow” display featuring a flex-fuel Avalanche. Flex-fuel vehicles are distributed throughout the GM stand, and prominently marked as such. The show organizers anticipate that more than 1.2 million attendees will flow through the show during the next week.GM is offering a free one-year National Ethanol Vehicle Coalition membership at the show. NEVC will provide updates on E85 fueling locations, legislative news, and full access to the NEVC web site. Individual membership normally carries a $50 contribution.
GM in February launched a sweeping consumer education and advertising campaign promoting E85 and GM’s flexible-fuel vehicles. “Live Green Go Yellow” ads broke during the Super Bowl XL broadcast and will continue throughout the year with print, web (livegreengoyellow.com) and broadcast media components.
In addition to being E85-capable, the 5.3-liter V8 engines in the Chevy Tahoe and Suburban feature Active Fuel Management—GM’s new term for displacement on demand—that enables the engine to operate on only half of its cylinders when full power is not needed.
Although when using gasoline, that combination allows the GM full-size SUVs to offer estimated fuel economy of 21 mpg on the highway (4WD), when using E85 that rating drops down to 14 mpg due to ethanol’s lower energy content compared to gasoline.
Nevertheless, from a positioning point of view, GM is aggressively going after what is seen as the more fuel-efficient competition, using gallons of petroleum gasoline as the metric.
| GM’s E85 Positioning Chart Gallons of Gasoline Saved Annually with GM E85 Vehicles vs. the Competition | ||||
|---|---|---|---|---|
| GM Model | Toyota Prius | Toyota Sequoia | Honda Insight | Honda Accord |
Using EPA Highway MPG estimates driving 15,000 miles per year. Mileage figures assume GM products us only E85. | ||||
| E85 Impala (23 mpg highway) |
196 | 784 | 165 | 419 |
| E85 2006 4WD Yukon (14 mpg highway) |
133 | 721 | 102 | 356 |
| E85 2006 2WD Silverado (16 mpg highway) |
153 | 741 | 122 | 376 |
There are problems with this positioning, however.
First, although it is true that a big, fuel-swilling E85 Yukon uses less petroleum gasoline than an E0 Honda Insight or an E0 Prius, it terms of actual fuel consumption—for which the consumer pays—it clearly uses a great deal more. Those same 15,000 miles of highway driving will see the E85 Yukon burn 1,071 gallons of fuel, versus 263 for the Insight or 294 for the Prius.
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| Promotional sign in New York—playing the environment card. |
Assuming we get to $3/gallon fairly soon, that’s a difference of more than $2,300, Yukon to Prius. If consumers are sensitive to either global warming or energy security concerns—both mitigated by biofuels—that might not be troubling. If consumers are more worried about how much they’re forking over to fill up the tank, however, that delta could be a problem.
Second, just because it is a biofuel doesn’t mean that ethanol is “free”; producing it still carries an energy and emissions cost. Fueling a 14mpg vehicle is still worse overall than fueling a 51mpg vehicle.
Third, indications are that in the short term, E85 is not going to be cheaper than gasoline.
Fourth, the lack of an E85 fueling infrastructure makes it likely that the flex-fuel vehicles will run primarily on gasoline, certainly in the short-term, and likely in the medium-term.
The 85 flex-fuel vehicles participating in the New York driveaway were, for example, fueled with gasoline, not E85. That’s not GM’s fault (there is only one E85 station in the area—on Long Island—and that just recently opened) but it does highlight the classic chicken-and-egg problem with moving to a new fuel.
The question for GM is whether or not consumers will buy into the E85 positioning in sufficient quantities, even when E85 fueling is scarce, to give the struggling giant time to make its next move.
There's another problem with their positioning.
Their implication is that the customer is using less oil, because gasoline comes from oil and ethanol comes from corn. At face value, the FlexFuel vehicles are responsible for consuming far less oil than the hybrids, right?
Well, no. After all, oil is used to grow the corn necessary for the ethanol. Of course, some oil is necessary to extract, refine, and deliver the gasoline, too. I'd be curious to see the numbers when all oil required to move the vehicles 100 miles is considered. I'd bet that the hybrids come out way ahead, because when push comes to shove, ethanol doesn't use much less oil than gasoline to move an identical vehicle 100 miles, and the hybrids are much more efficient vehicles.
Posted by: stomv | 14 April 2006 at 03:35 AM
At an optimistic figure of EROEI of 1.5, it would take 90% of US agricultural land to grow the corn required to replace 50% of gasoline usage. (this assumes the energy invested is also ethanol). See calculator here.
Posted by: JN2 | 14 April 2006 at 03:47 AM
It's really not even worth getting into that discussion about corn ethanol. It does save some oil, but not as much as GM is indicating.
I'm a little confused as to why GM is making these comparisons - a full size SUV to a Prius? They are just setting themselves up for questions on the validity of their statements. The problem is the vastly different energy ratios of the different production methods of ethanol. When cellulose ethanol ramps up, this will be a very good point to make. Until then, far too bold a statement.
Posted by: Angelo | 14 April 2006 at 03:58 AM
Celulose ethanol.
Farm equipment run on biodiesel/WVO.
At the moment the flex fuel idea is sadly just to line the pockets of big agri-business. But it has a huge potential.
Posted by: James | 14 April 2006 at 04:17 AM
No one is suggesting that CORN ethanol is going to replace oil. However, we still have excess corn supply to put to use. More importantly, our primary goal is to reduce imports, and further to that, imports from the Middle East .
Only about 20% of our oil imports come from the Middle East (about 13% of all oil we use), which means that we would need to displace about 18bil gallons of gasoline that come from that area. Although your "calculator" does not allow an exact percentage of gasoline to be enterred, entering 25% and roughly cutting that in half means that about 22% of agricultural land would be needed to displace MIDDLE EAST oil.
That still seems like a lot, but that assumes we are only using corn ethanol, and further to that, our production techniques in that area do not improve. There have been many news items on this site about how they can improve those yields.
However, using switchgrass/cellulose ethanol, we see that percentage come down from 22 to 6. As you pointed out, switchgrass does not need to be grown on agricultural quality land, further lowering that number. Lastly, we haven't even begun to realize advances in this area. Studies have shown that after a few years of cultivating switchgrass crops properly, the yields will go up dramatically. Additionally, the production techniques keep improving.
Bottom line - we have to create a demand for ethanol for any of this to happen, which means FFVs. Yes, many of them will continue to run on gasoline for years, but this is the best approach. Create a demand and let the market sort it out.
Posted by: Angelo | 14 April 2006 at 04:36 AM
I'd rather line the pockets of agri-business traded on the NYSE than the political leaders of the Middle East. Besides, as you've mentioned, there is that huge potential.
Most importantly perhaps, a more diverse transportation sector (gasoline, diesel, bio, ethanol, mass transit) is less succeptible to price or supply shocks, since people have more alternatives. Sure, the price of the substitute goods may go up, but the nation won't grind to a halt if we have more diverse transportation options. That's a huge hidden benefit to more flex fuel and ethanol.
Posted by: stomv | 14 April 2006 at 04:37 AM
GM could have used a 40-Ton 26-wheller (fully loaded) and the potential reduction would be better yet. That doesn't make the GM 4 x 4 gas guzzlers better? What is the point here?
Posted by: Harvey D. | 14 April 2006 at 05:43 AM
This is so wrong on so many levels, one doesn't know where to start. The currently accepted EROI is about 1.2, accepting the study done by the University of California. If one's mileage is reduced to 14 mpg by ethanol, it is absurd to talk about how much oil one is savings vs. a Prius, for example. Regardless of how one cuts it, these behomoths are using massive amounts of resources.
And to boot, most of the ethanol plants coming out today are using coal. Great for the GHG situation, isn't it?
We keep hearing about cellulosic ethanol, but it's not here. Meanwhile, agribusiness is ramping up production of corn based ethanol and could care less about the environmental and food impacts of all that production.
Oil is fungible and we will continue to get our oil from the Middle East for the foreseeable future. This obsession with the Middle East seems to assume that terrorism is our biggest problem. It isn't. Global warming is.
If GM is so concerned about our dependence upon oil, then push smaller car based FFVs with superior mileage. Using the oil situation to unload your biggest SUVs is a totally cynical manipulation of the public.
Posted by: t | 14 April 2006 at 07:12 AM
Mike, Mike, Mike, what's reality got to do, got to do with it?
Detroit abandoned product for image a long time ago and there is no turning back.
Figures don't lie, but spin doctors have got condo paymments to make, baby!
Posted by: jcwinnie | 14 April 2006 at 07:32 AM
http://www.agriculture.state.ia.us/e85q&a.html
http://extension.agron.iastate.edu/waterquality/neidpmaterials/waterw3.html
2.7 gallon ethanol per bushel 150 - 220 bushel per acre
14 mpg on e85 15,000 mi /yr
1071 gallons of E85 /yr
910 gallons of ethanol
1.5 - 2.25 acre per yr per vehicle using above numbers.
Will we deplete human and animal food supplies by using corn and other grains for fuel production?
No, actually the production of ethanol from corn uses only the starch of the corn kernel, all of the valuable protein, minerals and nutrients remain. One bushel of corn produces about 2.7 gallons of ethanol AND 11.4 pounds of gluten feed (20% protein) AND 3 pounds of gluten meal (60% protein) AND 1.6 pounds of corn oil.
Does it take more energy to produce a gallon of ethanol than the energy we get out of it?
No. Current research indicates an approximate 38% gain in the overall corn-to-ethanol process and use of that ethanol for fuel. Corn yields and processing technologies have improved significantly over the past 20 years and they continue to do so, making ethanol production less and less energy intensive.
Posted by: rj | 14 April 2006 at 08:34 AM
Another lame PR stunt by GM to hide the fact that they
can't compete with Japan, Europe or Korea.
Posted by: dursun | 14 April 2006 at 09:03 AM
Convert that 1.6 pounds of corn oil to biodiesel to be used by growers and shippers. Use cobs, stalks, and leaves as distillery fuel and zero petroleum is used.
Posted by: tom deplume | 14 April 2006 at 09:25 AM
Does anyone know how much potential biodiesel and ethanol there is from feedstock (I believe that's the right word) that is not going to be consumed as food in the United States? e.g fish and chip shop oil, spoilt grain, excess corn production. What percentage of petrol and diesel could be replaced just by using feedstock that is not going to be consumed as food.
Posted by: mango | 14 April 2006 at 06:13 PM
I think that GM seems to be concerned about profit in selling their large vehicles. There apparently is little consideration for:
1. The amount of energy needed to produce the ethanol
2. Further global warming that the burning of ethanol will cause.
3. Soil depletion effects in the long term.
4. Driving up prices of food crops because of possible land shortages.
I do not believe that ethanol guzzling SUV's are the answer any more than gasoline guzzlers. GM just wants to continue its profit making without regard to consequences.
[email protected]
[email protected]
Posted by: Adrian Akau | 15 April 2006 at 01:05 PM
1. All fuel takes energy to produce.
2. Burning ethanol produces less GH gasses than burning petrol.
3. That is happening right now, are you complaining about the farmers? Or is it just bad now GM are involved?
4. The parts of the corn used to produce food are not used to produce ethanol. A plant can do both, making it more efficient.
What do you think is the answer?
By the way, GMs profit making stopped several years ago.
Posted by: James | 15 April 2006 at 02:32 PM
I would like to mention the irony of parking E85 vehicles in front of the New York autoshow, when in New York, it's almost impossible to get public access to E85.
Posted by: toyo | 20 April 2006 at 11:38 PM
video
The above is a great talk given by an expert in the field regarding ethanol and its uses and addresses several of the misconceptions that are rampant in public opinion. It is about an hour, but its highly informative.
Posted by: james | 29 April 2006 at 02:15 AM
It may be that producing ethanol using coal is no better for the environment than burning gasoline. I'd rather give my money to West Virginia & Pennsylvania coal miners, & Illinois & Iowa farmers, than Arabs any day. Believe me, many of us will buy ethanol if it's available, even if it's a little more expensive, & it won't be for long anyway.
Posted by: xxx | 01 May 2006 at 10:22 AM