Pump action

March 26, 2007 - Exclusive
By Dana Childs, Cleantech Group

Now that the three biggest American automakers seem to have succeeded in forestalling fuel efficiency legislation in the U.S., who will the short term cleantech winners be?

Could they be tiny companies like CleanFuel USA, which sells retrofit kits to make gas stations' pumps E85-capable?

Today, U.S. automaker CEOs met with President George Bush to back incentives to bring ethanol and biodiesel to more pumps as the companies boost output of so-called flex-fuel vehicles.

American automakers have lobbied aggressively against raising fuel economy standards, saying it would be prohibitively expensive at a time when they're losing historic amounts of money.

Just last year, GM, Ford and Chrysler posted a combined $16 billion in losses.

The three companies have long been building in support for E85, the blend of 85% ethanol and 15% gasoline that about 6 million of their vehicles can use for fuel today. The three pledged last year to make half of their vehicles flex-fuel capable by 2012, and reiterated that pledge today, but only if more pumps and filling stations capable of handling alternative fuels were made available.

Detroit complains there are 170,000 gas stations nationwide, but only 1,100 pumps that can deliver E85. Most are located in the Midwest, where most of the corn for ethanol is grown.

Putting an E85 outlet within five miles of most U.S. motorists would require at least 20,000 pumps, said Phil Lampert, executive director of the National Ethanol Vehicle Coalition in Jefferson City, Missouri, to Bloomberg today.

The CEOs of Ford, GM and Chrysler said the government needs to step in to fix that. A new federal tax credit of up to $30,000 helps defray service stations' E85 conversion costs, but the automakers said more should be done.

"We asked the President to help provide Americans with reasonable access to these fuels at a price that is competitive with gasoline. We expressed to the President that we are willing to lead the way, but we need government and fuel providers to increase infrastructure before we can make a meaningful impact," the three said in a statement.

Which is why companies like CleanFuel USA and others that convert gasoline stations' equipment to dispense ethanol and biodiesel should be expected to be pretty excited about the day's developments in Washington.

CleanFuel USA could not be reached for comment.

After his meeting with the automakers today, President Bush examined three vehicles on the lawn of the White House: Ford's Edge HySeries, a fuel-cell concept car with a plug-in hybrid drive, GM's flex-fuel Chevrolet Impala that runs on E-85 and Chrysler's Jeep Cherokee biodiesel sport-utility vehicle.

Today's meeting with Bush in Washington was the second time in four months that GM's Rick Wagoner, Ford's Alan Mulally and Chrysler's Tom LaSorda pressed the president to expand access to biofuels.

The executives prefer that option over stricter fuel-economy standards as a way to cut U.S. oil use, though automakers accept the government will impose some increase in fuel standards, probably next year.

GM, Ford and Auburn Hills, Michigan-based Chrysler are closing plants and cutting jobs as they struggle to contain market share losses to Japan's Toyota and Honda, the biggest sellers of gasoline-electric hybrids in the U.S.

The Japanese automakers also say they wouldn't mind an increase in the corporate average fuel economy standard that would require greater fuel efficiency across their fleets.


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