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NASCAR ponders following IRL's lead with ethanol: Green marketing a major motivator for race series

April 7, 2008

The Indy Racing League was the first North American race series to use an alternative fuel to power its cars. Now it appears NASCAR might follow suit-news that has the attention of race fans and sponsors alike.

"We're looking at eight or nine different alternative fuels," said Andrew Giangola, NASCAR director of business communication. "Ethanol is one of the alternatives we're looking at."

NASCAR has put no timetable on adopting an alternative fuel. Because the league switched from leaded, petroleum-based fuel to unleaded just last year, it is probably several years from making another change. But sources within NASCAR said the movement to "go green" and latch onto new technology is building serious momentum within the stock car racing series and pushing the switch to ethanol faster than previously anticipated.

Debate has emerged about which plant is better suited for ethanol production: corn or switchgrass. Corn-based ethanol has come under fire for the pollution it causes during the refining process.

For now, the racing industry is less concerned with what ethanol is made of and more interested in its overall benefits.

The chief benefit, IRL officials said, is that using ethanol allows sponsors to line up behind the green movement. Going green is one of the hottest marketing touch points today, said sports marketers.

"We've marketed this series on four things; speed, technology and innovation, diversity, and being green or eco-friendly," said Terry Angstadt, president of IRL's commercial division. "Ethanol fits in very well with innovation and going green."

The relationship has also helped IRL's ethanol provider, Missouri-based Lifeline Foods, introduce the fuel to consumers.

If NASCAR switches to ethanol, its relationship with millions of loyal fans would no doubt drive consumers in considerable numbers to the pump in search of the alternative fuel, said sports marketers.

"Historically, NASCAR fans have been among the most loyal, and that extends to series sponsors and suppliers," said Mel Poole, president of Sponsorlogic, a Charlotte, N.C.-based sponsorship consultancy.

Whatever it does, NASCAR will be careful not to cannibalize its current corporate partnerships.

Sunoco is NASCAR's official fuel supplier, a deal with an estimated $5 million annual value. While Sunoco is studying alternative fuel production, its bread and butter is petroleum-based fossil fuel.

"Anything we do will be in lock-step with Sunoco," Giangola said.

When the IRL ushered in ethanol, initially in blended form in 2006 and pure ethanol last year, the series had no official fuel provider, making the transition simpler.

Officials for Philadelphia-based Sunoco Inc., which has been NASCAR's official fuel supplier since 2004, said they have been selling ethanol blends at consumer filling stations since 1996 and want to grow their market share.

"We're in the fuel business, and we're interested in new technology," said Sunoco spokesman Thomas Golembeski.

Maintaining the cars' performance is key, Golembeski said, adding, "We haven't yet found an alternative fuel that is compatible with NASCAR racing."

NASCAR officials are fearful ethanol will be less efficient than petroleum-based fuel. Studies show larger fuel lines and fuel cells may be needed to get the same power provided by petroleum-based fuel, NASCAR officials said. There is also fear that weaker ethanol fuel economy would triple the number of pit stops. "That's just not true," countered IRL's Angstadt. "Since switching to ethanol, we've experienced no drop in efficiency and, in fact, have decreased the size of our fuel cell from 30 gallons to 22 gallons. It's very high octane and very efficient."

The IRL uses 90,000 to 100,000 gallons of cornbased ethanol annually. That's 30,000 gallons less fuel than the series used when cars guzzled petroleum-based methanol. Ethanol proponents said it's critical to reduce the environmental impact of pastimes such as auto racing. NASCAR uses 100,000 gallons of fuel annually for its Nextel Cup series alone, and probably another 100,000 gallons for its other series. By comparison, U.S. auto drivers use 350 million gallons of gasoline daily.

"NASCAR's consumption of gas is insignificant with respect to the total American consumption," Giangola said. "But NASCAR is a symbol, and an important symbol."
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