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Old 03-08-2006, 06:48   #1 (permalink)
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US:Ford: Oil companies need more ethanol pumps

Ford: Oil companies need more ethanol pumps

Reuters

WASHINGTON -- With millions of flexible-fuel vehicles on U.S. roads and more coming, major oil companies must install many more service station pumps to provide gasoline made mostly from ethanol to run them, a top Ford Motor Co. official told Congress on Tuesday.

State officials in the U.S. Midwest, where farmers grow much of the corn used in ethanol production, have accused big oil companies of dragging their feet in providing motorists with fuel that is a mixture of 85 percent ethanol and 15 percent gasoline. President George W. Bush has called for more ethanol use to reduce foreign oil imports, and the Energy Department is looking into the accusations.

Susan Cischke, Ford vice president of environmental and safety engineering, raised the issue at a Senate Energy Committee hearing on U.S. energy security, where she complained there are less than 600 of the so-called E85 fueling stations out of over 170,000 retail gasoline stations nationwide.

"For ethanol to be a real player in the transportation sector and lessen America's dependence on foreign oil, we need a strong, long-term focus on policies that increase U.S. ethanol production and accelerate E85 infrastructure development," Cischke told lawmakers.

Most service stations carrying E85 fuel are mom-and-pop or independently owned stores in the U.S. Midwest.

U.S. automakers have produced almost 6 million flexible-fuel vehicles. If they all ran on E85 fuel, over 2.5 billion gallons of traditional gasoline could be saved, Cischke said.

But she said the flexible-fuel cars and trucks cannot boost U.S. energy security if E85 fuel pumps are not available.

"We obviously need key partners like the oil industry to invest in developing and marketing renewable fuels, like E85," she told lawmakers.

Sen. Pete Domenici, who chairs the energy panel, said the lack of distribution for E85 is a big problem. "How do we get the companies to put the tanks out there?"

He said the government should lean on oil companies to install more pumps and Congress should follow up to "find out is there any role we have, any possible way we can pursue this, so that the companies will do more."

Domenici said he is "seriously thinking" of meeting with oil company representatives and Bush administration officials to see if enough is being done to get the ethanol fuel to consumers.

The scarcity of E85 pumps has the attention of U.S. Energy Secretary Sam Bodman, who said last week he planned to ask big oil companies why they were not installing more of the pumps.

He said if the companies don't make an effort to provide more ethanol fuel, there would be a more "aggressive response" from the government. He did not offer details.

A spokesperson for the American Petroleum Institute, the trade group for big oil companies, said it costs $200,000 to install an E85 pump and separate underground tank for the fuel.

That is a large investment for a product that does not have a guaranteed market, the spokesperson said. The API also points out that while most service stations carry a certain brand of gasoline, they are not owned by the oil company that makes it.
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