Amid rising gasoline prices, group pushes ethanol benefits

Grain-based fuel seen as savior by some, impractical by others

March 05, 2000|By Anne Haddad | Anne Haddad,SUN STAFF

The price of gasoline is at a nine-year high. The price of corn is nearing a 30-year low.

Maybe, just maybe, the combination will build demand for ethanol, the alternative fuel derived from corn and other grains -- a fuel the Maryland Grain Farmers Association is about to market more aggressively.

The association has decided to spend $30,000 to add ethanol pumps to at least four fuel stations in the region as part of an alternative fuels program supported by the U.S. Energy Department.

The pumps will be the first in the state offering the fuel mix called E-85 -- a blend of 85 percent ethanol and 15 percent gasoline, which about 1 percent of the vehicles on American roads are equipped to use.

"We can sell a gallon of E-85 for 15 to 20 cents cheaper than a gallon of gasoline," said Phil Lampert, project coordinator for the National Ethanol Vehicle Coalition, an organization supported by grain farmers and farm belt governors.

Ethanol's price advantage grows as gasoline prices rise but could disappear if grain prices rise, too -- as would happen if ethanol consumption increased sharply.

"It's almost like religion in the Midwest," said an aide to Democratic Sen. Tom Daschle of South Dakota, the Senate minority leader.

Part of ethanol's price advantage comes from federal subsidies and tax breaks.

A small number of elected officials, including Republican Sen. John McCain of Arizona, are criticizing the subsidies as corporate welfare for the fuel's manufacturers, led by Archer Daniels Midland Corp. of Illinois.

Congress has extended a 5.4 cent-a-gallon tax exemption on ethanol-based fuels through 2007.

Only 150 stations in the United States sell E-85, and experts say that virtually all the vehicles capable of using it are consuming gasoline for lack of ethanol pumps.

The Maryland Grain Farmers Association hopes to remedy that by placing pumps near federal offices, which are under a congressional mandate to expand fleets of vehicles capable of using ethanol as well as gasoline.

One pump is earmarked for a Shell station at the end of Harry S. Truman Parkway in Annapolis, near a U.S. Postal Service office expected to have 80 Ford Explorers capable of burning ethanol. A second will be in the Gaithersburg area, to serve 300 postal vehicles and, eventually, vehicles belonging to the Montgomery County government.

Lynne Hoot, executive director of the Maryland Grain Producers Association, said another pump would open on the grounds of the Pentagon, in northern Virginia. Others could be placed in Gaithersburg, Fort Meade and the University of Maryland, College Park.

Ethanol is an alcohol made from fermented corn -- or other plants high in sugar and cellulose. An ethanol refinery under construction in Louisiana is intended to make ethanol from sugar cane waste. A refinery planned for California's Sacramento Valley would produce ethanol from rice hulls and straw.

Unlike gasoline, sent to distributors by pipeline, ethanol is transported by truck or rail and mixed with gasoline by distributors. And cars capable of using both E-85 and gasoline get 10 percent to 15 percent fewer miles per gallon with the ethanol-based fuel.

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