Ethanol fuel pumps may debut here by '06: Still no place for the masses to buy E85, despite interest in the alternative to gasoline

August 29, 2005

Even though Indiana is one of the nation's biggest growers of corn-the key ingredient in cheaper-than-gasoline ethanol-not a single ethanol pump is available to the average motorist in the Indianapolis area.

That twisted irony in a day of record gasoline prices may soon be no more, with a handful of central Indiana gas stations likely to start offering an ethanol alternative-known as E85-by yearend, according to proponents of the fuel.

"I hope by Christmas to have a couple in the Indianapolis area," said Kellie Walsh, coordinator of Central Indiana Clean Cities Alliance, who has been promoting the fuel with local station operators. The 85 percent ethanol/15 percent gasoline blend is currently 30 cents to 50 cents a gallon cheaper than gas.

Only vehicles whose fuel systems have been modified to handle E85 can burn the fuel without damage. Most of the major car manufacturers for years have sold duel-fuel versions of their most popular vehicles, including Ford's Taurus and DaimlerChrysler's Caravan.

There are E85 pumps in Indianapolis, but they're in a private fuel depot restricted to city and state fleet vehicles.

Until gas prices started climbing in recent months, few in the area thought much about E85. A gas station near Interstate 70 and Holt Road used to sell the blend about five years ago, but the manager said hardly anyone used it and she couldn't wait to convert the pump to diesel fuel.

According to Walsh, the manager of that now-closed gas station never promoted E85 and didn't bother to update its price on a signboard, so consumers never appreciated E85's price advantage.

"It was a fiasco," she said.

To win stations over to E85, Walsh has been trying to explain what's in it for them, not motorists. The state of Indiana offers an alternative fuel grant, up to $50,000, that funds up to 50 percent of the cost of preparing equipment to dispense E85. Meanwhile, stations are eligible for a $30,000 tax credit, per location, under the new federal energy bill. The cost can be as little as $3,000 for a station to clean out an unused tank and convert rubber hoses and filters to handle E85.

Those financial incentives got the attention of one gas station company that might start selling ethanol in Columbus when the credit kicks in next January, Walsh said. The operator also might sell E85 at his Greenfield station next month, she said.

Owners of a Bargersville station under construction "are 80 percent sure" they will offer E85, Walsh said. Meanwhile, Walsh and Rob Swain, director of economic development at the Indiana State Department of Agriculture, said they've had talks with some big-box stores in the Indianapolis area that have fueling stations. They declined to identify them.

"It's a trepidation on the retailer's part. They say, 'If I built it, will they come?'" Swain said.

The momentum for E85 may be unstoppable as gas prices head north of $2.50 a gallon. A Jiffy Mini-Mart in Terre Haute, one of fewer than a dozen stations in Indiana selling E85, lately has been selling about 800 gallons a day of the blend, Swain said.

But what E85 proponents and media reports rarely mention is that, even now, it still may be more economical to put gas in E85-capable vehicles-even if ethanol is up to 50 cents cheaper a gallon.

Ethanol is less efficient than gasoline, with mileage upwards of 12 percent worse under some conditions. So in some vehicles, E85 would have to be 60 cents cheaper than gas before it began to show true cost savings.

Web sites such as www.fueleconomy.govallow motorists to estimate the annual cost of gas vs. E85 for dual-fuel vehicles.

Ethanol proponents say there are other benefits, however, such as E85's being more environmentally friendly than gas. They also point to its potential to help farmers and refiners and grow the economies of corn-rich states. Less tangibly, they point out that the nation uses that much less petroleum when E85 is used-a figurative and potentially rewarding poke in the eyes of oil companies and antagonist Arab oil lords.

Ethanol prices in Indiana may fall as supply increases. There are plans to build at least four ethanol distilling plants in the state that could add 240 million gallons a year to the 102 million gallons of E85 already produced here.
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