Flex-Fuel Bait and Switch

Daniel J. Weiss and Nat Gryll detail why two amendments to critical energy legislation now before Congress should not be taken seriously.

Click to see how many flex-fuel vehicles are on the road and how many service stations offer E85.
The Senate energy bill (H.R. 6) now under debate on Capitol Hill has a number of provisions to increase our nation’s energy independence, lower energy costs for families, and reduce pollution that contributes to global warming. But the provision that would have the largest impact on these goals is fuel economy standards, which would eventually improve gas mileage for cars and light trucks to 35 miles per gallon by 2020. 

This critical program is now under assault by the auto industry that spent the last 20 years in opposition to all measures to reduce gasoline consumption. The automakers, through an amendment proposed by Sen. Carl Levin (D-MI), want to substitute real reductions in oil use for what are currently phantom reductions from the production of flexible fuel vehicles that are supposed to run on ethanol but can’t due to the unavailability of this fuel across the country.

This is no way to fix our nation’s energy problems. Consider the following facts. 

U.S. Guzzles Oil

The United States consumes 20.1 million barrels of oil per day, 69 percent of which is used for transportation.[1] Of this, 62 percent is used for surface transportation by cars and light trucks.[2] Nearly 40 percent of all U.S. oil imports come from potentially hostile or unstable regimes.[3] And 92 percent of conventional oil reserves are in these nations.[4] 

Fuel economy standards first set in 1975 led to a dramatic rise in fuel economy and a decline in oil consumption, but by the 1980s these gains were eroded by the increases in the number and size of cars as well as the number of vehicle miles traveled. The Levin proposal would save less than one week’s worth of oil in the year 2020.[5]

The Senate Bill Updates 1989 Rules for New Fuel Economy Standards

The current standard of 27.5 miles per gallon for cars was set nearly 20 years ago, in 1989. The Senate Commerce Committee’s proposal to increase cars and trucks to 35 mpg by 2020 was passed with bipartisan support. When fully implemented it would reduce oil consumption by approximately 2.1 million barrels per day by 2026,[6] reducing the need for the same amount of oil that EIA predicts we will require from unconventional sources like coal to liquids or oil shale in 2030.[7]  

The Energy Security Leadership Council, led by retired Marine Corps Commandant Gen. P.X. Kelly and Frederick Smith, chief executive of Federal Express, noted that the pending fuel economy provision “is the single most effective measure that can be taken to address the profound national security threat posed to the United States by our dependence on oil.”

Flexible-Fuel Vehicles Can Run on Ethanol to Save Oil

Sustainably produced renewable biofuels enjoy significant and justifiable public support as a way to reduce oil consumption, support rural economies, and contribute to reductions in greenhouse gas emissions. E85, a mix of 85 percent ethanol and 15 percent gasoline,[8] could replace some gasoline use when it is burned in flexible-fuel vehicles that burn either E85 or conventional gasoline. 

The extra cost of manufacturing a flex-fuel vehicle is approximately $50 to $100. Currently, there are more than 4.4 million flex-fuel (dual fuel) vehicles on the road. Auto companies get a “credit” for every flex-fuel vehicle they produce, on the assumption that this is offsetting gasoline use whether or not the fuel is used. This acts as a fuel economy loophole and enables companies to lower the actual average fuel economy of their remaining fleet. 

E85 is Hard to Find in Most States

Giving fuel economy credit for the production of flex-fuel cars would work if these cars ran on E85, which would reduce oil use. However, a study found that more than 99 percent of the flex-fuel cars run on regular gasoline[9] because E85 is rarely available to the everyday driving public. The National Ethanol Vehicle Coalition reports that there are only 1,133 public service stations that sell E85,[10] out of 170,000 service stations.[11]  In other words, only one of every 170 stations sells E85. And more than one third of these stations are in Illinois and Minnesota.  There are two-thirds fewer service stations per vehicle available for FFV’s to use E85 compared to service stations per regular vehicles.[12]

The disparity between flex-fuel vehicles and E85 availability becomes clear by comparing a state’s number of flex-fuel vehicles with stations that sell E85 to the public (see chart). For instance, California drivers have 257,318 flex-fuel vehicles but the state has only two public stations with E85. New Jersey has 116,512 flex-fuel vehicles and not a single service station with E85.

There are twelve other states and Washington D.C. that have a total of 404,877 flex-fuel cars but not one station among them that sells E85. These states comprise an area equivalent to one-third of the continental United States without a single E85 station.[13]

Flex-Fuel Provisions Produce Phantom Oil Savings

Rather than reduce the fuel economy of their car and light truck fleet, auto companies would rather rely on the production of flex-fuel vehicles to achieve oil reductions since it only costs $50 to $100 to convert an ordinary car into a flex-fuel one. A Consumer Reports article found:

“The FFV surge is being motivated by generous fuel-economy credits that auto-makers get for every FFV they build, even if it never runs on E85. This allows them to pump out more gas-guzzling large SUVs and pickups, which is resulting in the consumption of many times more gallons of gasoline than E85 now replaces.”[14]

Levin’s proposal to amend the fuel economy standards provision would increase the number of flex-fuel vehicles without ensuring the actual use of E85. And without significantly greater availability of E85, these millions of new flex-fuel vehicles will continue to run on gasoline—doing nothing to reduce oil use.

This approach, combined with the Levin proposal’s delays and weaker economy standards for cars and light trucks, would significantly diminish actual reductions in oil use and increase global warming pollution. The proposal would also set the 2012 fuel economy standard (29 mpg) lower than what was already achieved in 2005 (29.2 mpg).[15]

What’s the Answer?

Increase the Sale and Availability of E85 and Require Better 35 MPG Fuel Economy

Increasing the availability of E85 requires that we invest in a renewable fuel infrastructure. Adequate distribution of renewable fuels is essential to ensuring that cleaner fuels are available so that the benefits of flex-fuel vehicles are actually achieved. 

This includes ensuring that ethanol fuel pumps are built where there is demand by creating a requirement that in any county in the nation where 10 percent of registered vehicles can run on flexible fuels, 10 percent of pumps must provide E85 fuel. This also should include providing low-interest loans and grants to ensure increased retail delivery of E85.

Any fuel economy plan akin to Levin’s amendment that relies heavily on flex-fuel vehicles burning E85 is not likely to achieve many reductions in oil use or global warming unless it is accompanied by immediate and forceful measures to increase the availability of the fuel.  Such measures are not in his proposal. In practice, such a plan is really a diversion to create the impression of action while auto companies continue to build cars with mediocre gas mileage, locking in years more of rising oil imports and increasing dependence on fossil fuels. Additionally, manufacturers will still be able to get CAFE credit even if alternative fuels are not used in the vehicle. Levin’s proposal fails to reduce our oil consumption or increase the use of cleaner, alternative fuels.

We can do better.


[1] Energy Information  Administration, Basic Petroleum Stats
[3] Energy Information Administration, US Imports by Country
Union of Concerned Scientists
[6] Union of Concerned Scientists
[8] See Chart
[9] Union of Concerned Scientists
[10] National Ethanol Vehicle Coalition
[12] US Bureau of Transit Statistics
[13] US Census Bureau
[14] see link.


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Daniel J. Weiss

Senior Fellow