Ethanol E85 fuel loses cost-benefit test to diesel


Anything's better than ethanol blend E85, even ordinary gasoline, a new cost-benefit analysis of alternative fuels by researcher John Graham at the Pardee Rand Graduate School finds.
Diesels scored highest, surprising even the researchers. "We were kind of expecting that hybrids would outperform diesels when we went into the study. It's close, but the advanced diesel" provides better performance and fuel economy for the price, he says.

Compared to gasoline, a driver could spend as much as $1,600 more on fuel over a vehicle's life burning E85, a mix of 85% ethanol and 15% gasoline, Graham calculates, while a diesel could save as much as $2,300.

Diesels are just creeping back into the USA as automakers introduce clean-burning models that meet new pollution rules.

The study, which Graham plans to discuss today at a National Academy of Sciences roundtable in Washington, undercuts E85 at a time Detroit automakers are lobbying Congress for ethanol-supportive legislation and fuel-economy credits for building E85-compatible vehicles.

General Motors (GM) and Ford Motor, (F) both pro-ethanol, are among companies that support the Rand school. "They aren't crazy about the results," Graham says.

The study also comes just as ethanol organizations are ramping up promotion of so-called intermediate blends of ethanol fuel, such as E20 — 20% ethanol and 80% gasoline — that they say could safely be used in conventional vehicles. Automakers currently limit regular vehicles to E10 blends, saying heavier concentrations of ethanol could damage fuel systems.

"Do we jump from E10 to E85? That's not a logical leap. That's why we're looking at these intermediate blends," says Brian Jennings, executive vice president at the American Coalition for Ethanol.

Graham's team calculated the individual and societal costs and benefits of conventional gasoline vehicles, gasoline-electric hybrids, high-tech diesels and flex-fuel vehicles burning E85 full time. Conclusion: Unless gasoline prices, averaging $3.10 a gallon now, rise above $4 and average $3.50 or more the next few years, or ethanol prices drop a lot, diesel's the best overall solution; E85's the worst.

Ethanol has less than 70% of the energy of gasoline, so more ethanol in the blend means fewer miles per gallon. Adjusted for lower energy content, E85 averaged about $3.25, AAA reported Thursday.

Drawbacks outweigh the high marks ethanol gets for adding almost nothing to the cost of a vehicle modified to burn E85 and for energy independence, Graham's team concluded. Ethanol is made from grain, mainly corn.

Graham, dean at school in Santa Monica, Calif., earlier worked at the U.S. Office of Management and Budget and founded the Harvard Center for Risk Analysis.

Rand is a non-profit corporation that researches public policy issues.