Tulsa World
July 9, 2006 Sunday Final Home Edition
Business; Energy; Pg. E1
Ford's hybrid strategy baffling
RUSSELL RAY
Energy writer
Understandably, some are puzzled by Ford Motor Co.'s recent decision to give
up on plans to build more hybrid vehicles. Hybrid sales are on course for another
record-setting year, driven by consumer demand for more energy-efficient cars
and trucks.
Yet Ford has abandoned its pledge to build 250,000 gas-electric hybrids a year
by 2010, saying it will instead focus on vehicles that use ethanol, a controversial
substitute for gasoline.
Ethanol is controversial because many scientists, economists and politicians say
expanding the use of ethanol will increase air pollution, raise pump prices and
boost the nation's dependency on foreign oil. In addition, ethanol is heavily
subsidized with government money because the economics don't work. Without
those subsidies, corn-based ethanol cannot compete with gasoline, even at
today's sky-high prices. What's more, ethanol doesn't have as much punch as
gasoline, gallon for gallon, and the nation's distribution system for ethanol is far
from efficient.
Despite these concerns, Ford joined other U.S. automakers last month in
announcing plans to double the production of "flex-fuel" vehicles that can run on
E85 fuel, a blend of 85 percent ethanol and 15 percent gasoline.
Ethanol, like it or not, is coming to a gas station near you.
Ford is scaling back its hybrid aspirations because the hybrid market is not as
strong as expected. The market is struggling because hybrids cost $3,000 to
$4,000 more than their conventional counterparts. Consumers are reluctant to
pay the premiums.
But Honda and Toyota, known for their keen sense and vision, have not dropped
their plans to expand the production of U.S. hybrids.
Ford switched directions because flex-fuel vehicles are cheaper to build. In
addition, public policy promotes the increased use of ethanol.
The government, in addition to giving credits to the makers of flex-fuel vehicles,
has mandated a doubling of ethanol in gasoline by 2012.
Ethanol, though, does benefit the economy. Thousands of jobs are being created
through the construction of new ethanol plants, which are known for generating
huge returns for investors. Additionally, ethanol is a financial boon for farmers,
who can make more money by selling their grain as feedstock for fuel.
Ethanol is without question a great political solution. But is it a practical one?
The fanfare over ethanol is overwhelming. It's American made; it's renewable;
and it burns cleaner than gasoline. What's not to love?
But there's so much more to the story, and it's not getting through to most
Americans.
Most ethanol is made from corn. The chief criticism of corn ethanol is that it
results in a net energy loss. That is, the amount of energy in a gallon of ethanol is
less than the amount of energy required to produce it.
If that's true, ethanol will not reduce air pollution or our dependency on foreign oil.
Julia Olmstead, a graduate student in plant breeding and sustainable
agriculture at Iowa State University, says ethanol's so-called benefits are
illusions created by industry.
"Corn is probably the most fossil fuel-dependent crop produced in the Midwest,"
Olmstead said. "If we're talking about growing corn on an even bigger scale than
we do now, that means huge quantities of fossil fuel-based fertilizers. The idea
that this is going to make us energy independent is a fallacy."
But the net energy value of corn ethanol is a matter of intense debate.
Cellulosic ethanol, which is made from native grasses such as switchgrass, is far
more energy efficient. As we move closer to the commercial production of
cellulosic ethanol, the case for ethanol will likely improve.
Russell Ray 581-8380 russell.ray@tulsaworld.com