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Detroit Auto Show: The Incredible, Shrinking Ethanol Alternative



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Detroit, Mich. — Just one year ago, in the warm glow of national acclaim and flanked by Gore ally and green venture capitalist Vinod Khosla, General Motors Chairman Rick Wagoner announced at the Detroit auto show a historic commitment to developing ethanol as an alternative fuel by investing in ethanol-startup Coskata and converting GM’s vehicle fleet to E85-capable vehicles. “This is a game changer,” said David Cole of the Center for Automotive Research.

This year — to national acclaim and flanked by Obama ally Gov. Jennifer Granholm of Michigan — Wagoner announced GM’s historic commitment to develop electric vehicles. “We think it could be a big game-changer,” Wagoner has said.

Ethanol was never mentioned.

GM insists ethanol is still a priority to relieve oil dependence in the short term. GM executive Robert Kruze said electrics are the “middle-term” solution and hydrogen a “long-term” solution. But the potholes ethanol has encountered in the last 12 months are proof of the rocky road gas alternatives face.

At the time of GM’s announcement, the federal government was also giving ethanol a boost by mandating the production of 7.5 billion gallons by 2012. But that mandate has had unintended consequences, admits GM advisor and University of Michigan Professor Ann Marie Sastry, a professor of Mechanical Enginering: farmers diverting corn from food to ethanol production resulted in rising food prices and worldwide food riots. She also laments corn ethanol’s voracious thirst for water.

Because of those issues, GM now touts its investments in cellulosic ethanol made from grasses and other non-food waste. But experts voice concern over the vast amounts of land necessary to produce enough cellulosic ethanol to meet U.S. fuel demand. And Sastry is worried by evidence that ethanol prices have moved in tandem with oil prices — a troubling development, given that a gallon ethanol goes only 70 percent as far as a gallon of gas.

Kruze says that the federal government should not favor one alternative over another. Ethanol, electric, and hydrogen have substantial technological and infrastructure hurdles to overcome if they are ever going to make sense in mass market transportation.

“Only the market can decide,” said Kruze.

That is, a market that gives favorable tax treatment to everything but gasoline. GM Vice President Bob Lutz reiterated on Monday the company’s call for a stiff gas tax to encourage the alternative du jour.



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