By Susan Erler, Times of Northwest Indiana
susan.erler@nwi.com
Flex-fuel trucks and cars were generating a buzz in mid-2007 when gas prices spiked at more than $3 a gallon and E85 sold for about 30 cents less than that.
With gas selling at nearly $2 a gallon in recent weeks and E85 prices about the same, interest in the 85 percent ethanol mix has fizzled, along with consumer excitement over vehicles equipped to handle the alternative fuel.
"I don't think anybody's asked about it recently," said Gary Roberson, sales manager at Christenson Chevrolet in Highland.
Sales of E85 -- ethanol mixed with 15 percent fossil fuel -- are down across the country, said Phillip Lampert, executive director of the National Ethanol Vehicle Coalition.
The coalition and other alternative fuel promoters "are doing our share to promote it as an alternative fuel that reduces green house gas emissions," Lampert said. "But with the price of gas being as cheap as it is, E85 sales have declined."
Because most cars get better mileage with gasoline than with E85, the alternative fuel should sell for about 15 percent less than regular gasoline, Lampert said.
"Today, we're probably not breaking even," he said.
Cheaper crude oil has proven a detriment to advancing the use of alternative fuels in the United States, Lampert said.
"It has hurt our expansion and our sales at existing sites," he said.
The number of gas stations to add E85 at the pump grew by just 479 nationwide last year, compared to 569 in 2006, Lampert said.
"We've got some work to do, no question of that, to bring E85 prices down," Lampert said.
In a kind of Catch-22, "if more people would use it, the price would go down," he said.
The number of gas stations selling E85 has remained static in Northwest Indiana, where grocery retailer Meijer a few years ago joined independent gas sellers Gas City, Family Express and Wilco County Market to be the only E85 retailers locally.
Gas City sales of E85 have been affected, said Len McEnery, general manager of the chain, which operates stations throughout Lake and Porter counties and where the price of E85 on Monday matched the price of a gallon of regular unleaded at $1.99.
Some consumers still ask for it, McEnery said, "because they believe in the fuel."
The sale of E10, a federally mandated mix of 10 percent ethanol and 90 percent fossil fuel, has not declined, Lampert said, because federal law requires refineries to make renewable fuels 10 percent of total sales.
That contributed to nearly 2 billion gallons in increased ethanol sales last year, Lampert said.
It also has helped drive continued production at Iroquois Bio-Energy, the ethanol production plant in Rensselaer that opened in early 2007.
"We're running just fine," Iroquois Bio-Energy chief operating officer Keith Gibson said of the plant, which has capacity to process 40 million gallons of fuel-grade ethanol annually from locally grown corn.
Demand for Iroquois Bio-Energy ethanol has been steady from a customer base that includes major oil companies, Gibson said. "We're running at capacity," he said.
But what had been a booming ethanol production outlook a few years ago has diminished, the National Ethanol Vehicle Coalition's Lampert said.
"The growth in demand for ethanol has slowed," Lampert said, "because of the increased price of ethanol in relation to gasoline." Some U.S. plants have closed because of lack of profitability, he said.
Overall, "ethanol sales will increase and will continue to increase," in part to meet minimal government requirements, Lampert said. "But they're not as high as we'd like them, and high-level blends have been particularly difficult."
A rise in gas prices will no doubt change the outlook for E85 sales and vehicles equipped to handle the fuel.
"Not everybody believes gas prices will stay this low," said Tom Brown, sales manager at Carroll Chevrolet in Crown Point. "If it goes back up, it makes E85 more attractive," Brown said.
Gas at $4 per gallon may seem a distant memory now, but flex-fuel vehicles will again generate consumer interest, Christensen Chevrolet's Roberson said.
"Oh sure, when the price of gasoline gets back up there, then they'll want to know about them," he said.