Ethanol's Stock Rises

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Ethanol's Stock Rises

Since 1998, the big three U.S. car manufacturers have built an estimated 1.2 million cars and trucks fitted with flexible fuel systems to help the automakers meet stringent fuel-economy standards.

General Motors Corp., Ford Motor Co. and DaimlerChrysler have been producing "flexible-fuel" vehicles the past three years that are capable of running on a cheaper mix of gasoline and ethanol, a renewable resource made from corn. Problem is, many people don't realize they own cars or trucks that can run on both unleaded gasoline and E85, a federally subsidized blend of 85 percent ethanol and 15 percent gasoline, Reuters reported.

The price of regular grade unleaded gasoline has soared in some Midwestern states, to as much as $1.96 a gallon in Illinois, second only to California's average $2.01 per gallon, according to the American Automobile Association. Some industry observers fear prices could rise to $3 a gallon this summer.

Conversely, the average price of E85 ethanol-gas mix is about $1.65 in the Midwest states, the report said. But because there are fewer than 200 fueling stations selling E85 across the United States, most in the corn-growing states of the Midwest, automakers have been reluctant to market the vehicles aggressively.

Flexible-fuel vehicles are able to run on standard gasoline, or E85, or a mixture of the two. The system is fitted as standard, at no extra charge, on many versions of some of the most popular-selling vehicles, including the Ford Taurus mid-size car, DaimlerChrysler's Dodge, Chrysler and Plymouth minivans and GM's Chevrolet Tahoe and Suburban large sport utility vehicles.

To lessen America's dependence on foreign oil, the U.S. government established corporate average fuel economy (CAFE) ratings that mandated an automaker's car fleet must average 27.5 miles per gallon, or 20.7 mpg for pickup trucks, SUVs and minivans, the report said.