Friday, October 24th, 2014

The Obameter

Mandate flexible fuel vehicles by 2012


"Will work with Congress and auto companies to ensure that all new vehicles have flexible fuel (FFV) capability . . . by the end of his first term in office."


Updates

Flex-fuel vehicles are nowhere near universal

During the 2008 presidential campaign, Barack Obama promised to "work with Congress and auto companies to ensure that all new vehicles have flexible fuel capability ... by the end of his first term in office."

Obama isn't at the end of his first term yet, but he doesn't seem likely to achieve this goal.

Flexible fuel vehicles are designed to run either on gasoline or on a blend of up to 85 percent ethanol, a format known as E85. Beyond a few mechanical modifications, flex-fuel vehicles are identical to gasoline-only models.

Flex-fuel vehicles in use have risen in recent years, expanding from almost none on the road in the early 1990s to 504,297 in use in 2009. In the meantime, carmakers offered no fewer than 85 models with flex-fuel options in 2011, including 25 made by General Motors, 18 by Ford and 11 by Chrysler. That's almost double the number of models available in 2007. Popularity is strongest in the Midwest, where much of the ethanol is produced from corn and where the fuel-dispensing infrastructure is most widespread.

Still, the twin challenges of weak demand and limited availability of E85 at gas stations has held back the market. In 2009, there were 805,777 E85 vehicles "made available” -- that is, sold or leased by the manufacturer or converted from traditional vehicles. That's only a small share of the almost 9.2 million light duty vehicles sold in the United States that year. E85 sales as a percentage of all sales remains in the single digits.

"Many of today's vehicles are flex-fuel compatible,” said Dennis Virag, president of the Toledo, Ohio-based Automotive Consulting Group Inc. "The problem is that relatively few people are using flex fuels, given the price and availability of gasoline. You can't force it on the consumer unless you ban gasoline, which will never happen.”

The future looks even more challenging with the expiration of a federal tax credit for ethanol at the start of 2012. "Without the 38-cent-per-gallon subsidy that went away Jan. 1, E85 prices are moving up,” the Minneapolis Star-Tribune reported. "It's still cheaper than gasoline, but the shrinking difference may not be enough to compensate drivers who get fewer miles per gallon because of the fuel's lower energy content.”

There have been legislative efforts to bring government regulation to bear. But they do not seem close to being adopted.

For instance, the Biofuels Market Expansion Act of 2011 was introduced in January 2011 by Sen. Tom Harkin, D-Iowa. Among other things, the bill requires car makers to ensure that at least 50 percent of non-electric automobiles and light duty trucks manufactured for sale in the United States are flex-fuel capable in the 2014 and 2015 model years. The percentage rises to 90 percent for 2016 and later years.

However, the bill has only three additional sponsors -- Sens. Tim Johnson, D-S.D., Amy Klobuchar, D-Minn., and Al Franken, D-Minn., each from a corn-producing state -- and the bill has advanced no further than a hearing. With Congress not expected to tackle much substantive legislation in an election year, the likelihood of this bill passing is close to nil.

The kicker: Even this bill falls short of Obama's promise to "ensure that all new vehicles have flexible fuel capability ... by the end of his first term in office.”

If circumstances change between now and 2013, we'll reconsider. But given that there is essentially no likelihood of such legislation passing before Obama's first term is over, we rate this a Promise Broken.

Sources:

Fueleconomy.gov, flexible fuel vehicles information page, accessed Feb. 7. 2012

Biofuels Market Expansion Act of 2011 bill summary at THOMAS

Minneapolis Star-Tribune, "The road for E85 fuel just got rougher," Jan. 8, 2012

Automotive Fleet, "Biofuels Bill Would Mandate More Flex-Fuel Vehicles," Feb. 1, 2011

U.S. Department of Energy, "Onroad AFVs Made Available," accessed Feb. 7, 2012

U.S. Department of Energy, "AFVs in Use," accessed Feb. 7, 2012

U.S. Department of Energy, "Number of AFV/HEV Models Manufactured by Original Equipment Manufacturers (OEMs)," accessed Feb. 7, 2012

U.S. Department of Energy, "Light-Duty Vehicles Sold in the U.S.," accessed Feb. 7, 2012

Interview with Dennis Virag, president of the Toledo, Ohio-based Automotive Consulting Group Inc., Feb. 7, 2012

Legislation would mandate flex-fuel cars by 2013

Among the many campaign promises Barack Obama made to improve the environment was this one: He said he would require that all new vehicles have flexible fuel capability by 2012, the last year of his first term.
 
It turns out Obama has made a bit of progress on his goal.
 
Before we delve into his pledge, here's some background on these automobiles. Flex-fuel vehicles are cars that can run on regular gasoline or a blend of up to 85 percent ethanol, commonly known as E-85. Corn producers and the ethanol industry say that requiring that all cars be made to run on both fuels will expand the market for ethanol dramatically.
 
Last August, Sens. Tom Harkin and Richard Lugar introduced bipartisan legislation that would advance Obama's goal. The Consumer Fuels and Vehicles Choice Act of 2009 would require 50 percent of all cars manufactured for sale in the United States be flex-fuel capable by 2011. By 2013, the mandate would apply to 90 percent of all automobiles manufactured for U.S. sale.
 
So far, the bill has only been introduced, and it has no other official sponsors other than Harkin and Lugar. Furthermore, the bill falls just a bit short of Obama's goal of making all cars flex-fuel ready by 2012. That said, Obama gave himself four years to fulfill his promise, so for now, we'll move this one to In the Works.

Sources:

Growth Energy, Growth Energy Endorses Legislation to Promote Flex Fuel Vehicles and Blender Pumps , Aug. 7, 2009

Library of Congress, text of Consumer Fuels and Vehicle Choice Act of 2009 , accessed Dec. 17, 2009