Ethanol Lives but Interest Wanes

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Ethanol Lives but Interest Wanes

SPRINGFIELD, Ill. -- Although the number of vehicles that can use E85 fuel is increasing, the clamor for permits to build ethanol plants in Illinois has slowed to a trickle.

Cheaper gasoline prices apparently have dampened the enthusiasm for the generally less expensive E85, according to a report by the State Journal-Register.

As gasoline prices plummeted from their summer highs of more than $4 per gallon to about half that, E85, the 85 percent ethanol/15 percent gasoline blend, for short periods of time, has been more expensive than regular unleaded fuel, despite federal and state tax breaks for ethanol. The state doesn’t charge sales tax on E85.

“The temporary lowering of gasoline prices has been a disincentive” to E85 use, acknowledged Maggie Carson, spokesperson for the Illinois Environmental Protection Agency (IEPA), though the state’s alternative fuels rebate program remains active and the number of facilities offering the ethanol-gasoline blend has grown since last year.

According to the report, individual applications for fuel rebates in 2008 have topped 500 so far, and with the deadline for application being Jan. 31, officials expect the number to meet or exceed the 2007 total of 1,079.

"Sales have dropped significantly" since the summer, when the price difference between E85 and gasoline was as much as $1 at some stations, said Randy Wilson, energy marketing manager for Sunrise Ag Service Co., a farmer cooperative that stores some E85 in bulk and delivers some to farms while also leasing out service stations that sell E85.

However, Wilson believes the plunge in gasoline prices is just temporary.

"It’s unusual because of the economy and crude dropping $100 a barrel over such a short period of time," he told the Journal-Register. "Over time, E85 will be a viable option for fuel. I think it will be here for a while."

The IEPA’s alternate-fuels rebate program -- which also offers rebates of up to $4,000 for purchasing alternate-fuel vehicles and a rebate for converting a standard gas- or diesel-burner to an alternate fuel -- started in 1998 and has issued more than $3.5 million in rebates through 2007, according to the report.

Alternative fuels include E85, biodiesel, natural gas, propane, electricity and hydrogen. Gasoline-electric hybrid vehicles don’t qualify for the rebates.

The number of gas stations and convenience stores offering E85 in Illinois, as well as the number of flexible-fuel vehicles registered in the state, is increasing.

At this time last year, Illinois had 166 facilities offering E85, while today there are 205, according to the Missouri-based National Ethanol Vehicle Coalition. Springfield commercial stations that sell E85, according to the coalition’s Web site,, include five Qik-n-EZ stations, a Meijer station, Mobil Super Pantry and Freedom Oil.

In January 2008, there were 251,276 flexible-fuel vehicles registered in Illinois. Today, there are 315,861, the coalition said.

However, the number of applications for permits to build ethanol plants in the state aren’t coming in as quickly, Carson acknowledged.

"The big rush has stopped," she said. "Those who planned to make ethanol have already done so."

Although E85 is usually cheaper than regular unleaded gasoline -- recent Illinois figures showed a spread of only about nine cents per gallon -- vehicles using E85 get fewer miles per gallon than when burning gasoline. Miles-per-gallon can drop 5 percent to 15 percent compared with regular gasoline, according to corn growers, although others said the mileage penalty for using E85 can be more -- even as high as 25 percent.

Ethanol can be a renewable and sustainable energy resource, and the use of E85 can extend the supplies of fossil fuels that rely on carbon-based compounds, proponents point out.

Meanwhile, the National Ethanol Vehicle Coalition (NEVC) will conduct its annual membership this month. The two-day event will include a half day of an executive session with the NEVC board of directors on Jan. 26 and 27, and open for others who would like to attend on the afternoon of Jan. 27. A reception at will take place on the evening of Jan. 26, and is open to the public, but registration is required. For more information, e-mail [email protected].