The ethanol argument, or why Saab have been shot in the foot – again.

Prompted by several emails from our resident treehugger, 1985 Gripen….


I really do think that ethanol has a part to play in the energy question facing the world today. Opponents of ethanol often treat the argument as if it’s being proposed as the only solution, which it most certainly isn’t. It’s a piece of a larger puzzle, but it’s a piece that’s available now using technology that’s still developing and getting better.

There’s a number of grass roots campaigners in the US getting quite vocal in their opposition to ethanol. There’s the food vs fuel people, who don’t agree that using corn is OK at all, and there’s the people who think that the use of corn is making kids in Mexico go hungry due to high corn prices. There’s the people that either don’t see or choose to ignore the emerging cellulosic ethanol technologies. And there’s Autoblog Green, who I have to say seem to be embracing anything that’s anti-ethanol lately. If it ain’t electric or diesel then it’s negative over there right now.

I get where they’re coming from, especially in the context of the US market. I just fear for what it might mean for Saab as a company that are leaders in the application of E85 technology.

Here’s one of the reasons why there’s a lot of cynicism about ethanol in the US market. Take a look at the range of E85 compatible vehicles available in the US in 2008. (Source, ABG and the National Ethanol Vehicle Coalition)

    4.7L Chrysler Aspen
    2.7L Chrysler Sebring Convertible & Sedan
    3.3L Chrysler Town & Country
    2.7L Dodge Avenger
    4.7L Dodge Dakota
    4.7L Dodge Durango
    3.3L Dodge Grand Caravan
    4.7L Dodge Ram
    4.7L Jeep Commander & Grand Cherokee

    4.6L Ford Crown Victoria (including taxi & police units)
    5.4L Ford F-150
    4.6L Mercury Grand Marquis

    General Motors
    3.5L & 3.9L Chevrolet Impala (including police units)
    5.3L Chevrolet Avalanche & Silverado, GMC Sierra
    5.3L Chevrolet Express & GMC Savana
    5.3L Chevrolet Suburban & GMC Yukon XL
    5.3L Chevrolet Tahoe & Police Package Tahoe, GMC Yukon
    3.9L Chevrolet Uplander
    3.9L Pontiac Montana (only available in Canada & Mexico)

    5.6L Nissan Armada
    5.6L Nissan Titan

    Mercedes Benz

    3.0L Mercedes Benz C300 Luxury & Sport

The smallest engine on that list is a 2.7 litre Chrysler unit. As you can see, most of these vehicles are SUVs and with the reduced mileage that you get on E85, they’re not going to be hardcore E85 users.

What we have here, quite simply, is a CAFE dodge. I don’t have a full understanding of the CAFE system, but it goes a little something like this: The US fuel economy regulations give some exemptions for a car company’s average fuel economy ratings (as measured accross their range of vehicles) if some of those vehicles are flex fuel. Naturally, the carmakers rort this loophole and make some of their biggest gas guzzlers E85 compatible so that they’re not caught in the calculations.

This isn’t intelligent use of E85 technology, nor is it an altruistic environmental gesture on the carmaker’s behalf. It’s intelligent use of the law to stay in business at a profit. GM’s not the only one, as you can see. For example, Ford has a very popular E85 vehicle in Europe, the Ford Focus Flexfuel. You can buy a Focus in the US (sedan only – bah!) but you can’t buy a Flexfuel version according to the list. Ford only offer it in their rather huge engines.

So what does all this mean for Saab?

Well, Saab’s BioPower technology is heading in a more sensible direction with regard to the use of E85. Saab’s philosophy of applying turbocharging to make better use of the high octane rating in the fuel means that you can use smaller engines to get more power. You still take a hit in fuel economy but even so, your doing much better than you would be in a big SUV. More power also equals more fun when you want it.

Saab hopes to use this technology to ‘right size’ engines in future models. Where they currently have 2 litre engines as the smallest size available (the 1.8 Biopower is actually a 2 litre engine) they hope to bring in smaller engines, around 1.4 litres for a future smaller Saab, for example. One would envision that this engine would be developed with BioPower in mind (rather than just having ethanol-resistant hardware added to a regular gasoline engine) and incorporate further efficiency gaining technology.

This is a more realistic view of ethanol as a fuel. Given the cycle of its production, it really does have the potential to slow the emissions from carbon-based sources. And given the emergence of cellulosic technology it really is becoming more viable as a realistic fuel option. The other major knock on ethanol in the US is that it’s produced from corn. It’s inefficient and adds gusto to the food vs fuel debate.

So what happens when Saab introduce BioPower to the US market. Will their ‘right’ attitude to the fuel show up the ‘wrong’ attitude exhibited by US carmakers so far? How are they going to market this technology an overcome the hurdles that to an extent, are of the parent company’s own making?

Time will tell, I guess.

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  1. Like it or not.
    Ethanol fuel from food crops has already started hurting our business as a confectionery producer.
    With the drought in Northern NSW hitting the wheat crop and Manildra using wheat to produce ethanol,our glucose(which is derived from wheat)has had a 30% price increase since last year,which means less profits for me so it will take longer for me to buy a new SAAB.
    I think more emphasis should be put into Bio Diesel than Ethanol.As Bio Diesel is more easily produced from waste products than from primary products.
    My $0.02c
    Anyone want some Fudge,its gluten free.

  2. LOL! The Pontiac Montana has an annotation that it’s only available in Canada and Mexico. As far as I know there isn’t a single ethanol pump in the whole of Mexico. The Mexican government has a monopoly on gas stations in Mexico and there is no competition. You either buy your gas at a state-owned PEMEX station or you don’t get gas. So if PEMEX doesn’t want to sell ethanol (and why would they?), it’s not going to be sold in Mexico.

    How can GM claim that ethanol is anything but a way to exploit CAFE loopholes?

    Note that only certain engine configurations of certain models are available as flex-fuel at all. Most owners of these vehicles don’t even know that their vehicle is capable of running E85. And even if they did, what is the incentive to do so? They get worse mileage and no performance gain. The reason why BioPower is so revolutionary is because it puts the higher octane in ethanol to good use. Not so these other vehicles.

    Swade, here’s some links you can read to help understand (not that I do either…):
    Wikipedia listing on CAFE

    As some sort of asinine CAFE loophole the E85 GMC Yukon (brother of the Chevy Tahoe) is credited as getting 33 mpg. Seriously. The vehicle gets 14 mpg on gasoline and 10 mpg on E85. This is what happens when auto makers’ lobbyists feed money into politicians’ pockets. Yet the auto makers fight tooth and nail when they’re asked to bring up the average fuel economy of their fleet or make cars with less emissions.
    Chevy Tahoe’s actual mileage on E85 tested by Consumer Reports

    Suggested reading: the “fuel economy, tax benefits, and criticisms” sections of the Wikipedia listing for the H2 to see what a crock of crap SAAB’s GM Premium stablemate has managed to earn for itself.

  3. Oh, and another thing (assuming this post doesn’t beat the one currently awaiting moderation due to excessive use of links to the comments):

    The reason those 2.7-liter Chrysler automobiles are E85-capable? They’re commonly company fleet cars (many more of some models of Chrysler cars are sold to fleets than private individuals). So they can get a large batch of cars with artificial economy ratings for CAFE scrutiny to help bring the average fuel economy up.

    When I got my company-leased 2.7-liter V6 Dodge Stratus SXT a couple years ago (a Chrysler product) I learned that certain versions of this car are E85-capable, but only the ones sold to fleets. Mine wasn’t technically a fleet purchase so it’s not E85-capable (the user has to check the VIN number against a list to see if it’s E85-capable). Besides, even if it was what would be the incentive to run E85 in it? Just that I’m “doing the right thing” in reducing our dependence on foreign oil and decreasing my contribution to greenhouse gas emissions. However, I’d be paying the equivalent of $4 a gallon of gasoline for that altruism due to the mileage hit…

  4. I have a question, is the E85 sold is Sweden made from corn or is it made from something else? I sure wouldn’t buy a car that gets 30pc higher fuel consumption irrespective of the green-ness of said car as it comes down to a money issue UNLESS E85 was 30pc cheaper which, in the US, it isnt. Saab would be wasting their time introducing the BioPower to the North American market – give us the TTid instead.

  5. I saw my first E85 pump a few weeks ago. It’s located in an Ohio farming community about two hours from my home. Even if a pump was located closer to home, I still think the disadvantages are too much to ignore.

    Perhaps the cellulosic ethanol will turn out better. It sure would be nice to trade lawn clippings for fuel. And for those who are concerned about the environment, consider this excerpt from wikipedia’s article on cellulosic ethanol.

    “According to US Department of Energy studies conducted by the Argonne Laboratories of the University of Chicago, one of the benefits of cellulosic ethanol is that it reduces greenhouse gas emissions (GHG) by 85% over reformulated gasoline. By contrast, starch ethanol (e.g., from corn), which most frequently uses natural gas to provide energy for the process, reduces GHG emissions by 18% to 29% over gasoline.”

  6. no such thing as corporate altruism, nor should there be. they can/should choose to be responsible, but not altruistic. i don’t mean to split hairs, but those words in the same sentence make me cringe.

    this E85 loophole/CAFE crap is one more reason why the government should not play favorites with technology. government favoritism creates unfair advantages, slowing progress. right now diesel > E85. but why don’t we have diesels in the US? hmmmm. we should simply educate as best as possible and let the consumer choose.

    since there are no US diesel options…and in the spirit of energy independence…there is a major lack of E85 in California. would it be ridiculous for GM to get into the E85 business? at least as a distributor? would it be insane to put an E85 pump on/near their dealer sales lot? sell more peanut butter, sell more jam. or, uh, vegemite.

    i don’t fully understand why GM isn’t trying to get diesels on the market yesterday, but maybe they are skipping over the next logical step in alternative fuel energy (diesel) and going straight to step 2, E85, because declining oil supplies (and skyrocketing price) is only a matter of time.

    i am excited about the 9-4x and the super-torque diesel we just heard about. but i’d like to know it has alternative fuel options down the line. i’d rather not be paying USD $8.00+/gal for oil-derived fuel in 2015 for my 5 year old car when the Chinese decide they really like to drive.


  7. Besides what 1985 Gripen and Zippy both say about paying more for ethanol and getting less mileage for it, we are still reeling from the promises of what MTBE was supposed to do for us. Boy did we get sold a bill of goods on that one.

    I think GM is being very smart by being cautious on bringing biofuel to the US. It is obvious they are playing the waiting game. They will do the bare minimum they have to do to comply with CAFE standards, but keep SAAB in the wings if it all pans out.

    I too think that the TTid is a better way to go, but who am I, just one consumer. After all, diesel engines, when they were invented, were meant to run on biofuel. They were never meant to run on carbon base fuels. There is a thriving business of people converting the old diesel cars to run on strained out french fry grease.

    We will still have to play a wait and see game with the US automakers since the US Supreme court told the EPA that they “should” be monitoring and controlling greenhouse gas emissions from manufacturing including cars and trucks.

    Naturally California and the Governator has jumped out with its own set of rules that currently no one can meet. This may be where SAAB can really shine. They have the technolgy jump on everyone else. They can get more horsepower per cubic inch than just about anyone out there, and do it with multiple fuel versions.

    Go SAAB

  8. Here’s another site worth a read: Discover the Alternatives It appears to be produced by a number of different auto manufacturers (including GM) advocating for a diversified solution with 3 major alternatives- ethanol, clean diesel, and hybrids:

    In the U.S., different regions favor different fuels.
    Even in the United States, there are regional differences in fuel use, reflecting different lifestyles and priorities.
    – In Minnesota, the state with the most ethanol fuel stations in the country (318), consumers purchase more ethanol-capable autos. In 2006, nearly 10,000 flexible fuel vehicles were sold in Minnesota.
    – In Texas, where many people need to drive great distances and haul heavy loads, diesel vehicles are popular. In 2006, more than 52,000 diesel vehicles were sold in Texas.
    – California leads the nation in hybrid vehicle sales, and state incentives like access to HOV lanes helped spur sales. In 2006, 43,000 hybrid-electric vehicles were sold in California.

    I think ethanol in some form in inevitable in the US. IMO this is the one of best applications of ethanol I’ve seen in concept

  9. ctm – does that mean BioPower in Sweden is contributing to deforestation of the Amazon? That’s what the corn farmers would have Americans believe 😛

    Over here there is a $.54/gal tariff on ethanol imported from Brazil. The big agricuture corporations have effective lobbyists.

  10. TimJ: it really is an issue in Brazil. If the market for sugarcane to produce ethanol for export increases there need to be safeguards put into place to ensure that the Amazon isn’t hacked down to grow sugarcane.

    I remember years ago boycotting McDonald’s because they were buying beef from cattle farms in Brazil. The farmers would destroy Amazon rainforest to create more grazing space because the market for cattle was that much greater. Luckily due to public pressure McDonald’s stopped buying beef from Brazil. Now I just boycott McDonald’s because its food sucks. 🙂

  11. Gripen – I agree about sustainabile development in Brazil, but I seriously doubt that the tariff on Brazilian ethanol was passed in order to protect the rainfoests.

    ehall – Europe has long limited greenhouse gases (CO2) from diesels – that’s not the technical problem for passing emissions in the US. Euro 5 applies different standards for NOx levels from diesel engines than from “petrol” engines. US EPA Tier 2 applies the same standard for NOx emissions to both types of engines (which happens to be lower than the Euro 5 limit for petrol cars). I also think diesel is the best alternative fuel option available today to reduce imports of foreign oil (besides building fewer SUVs), but I live in a place that experiences the negative affects of NOx – aka smog. Therefore I won’t whine about the EPA or CARB Clean Air regulations – how do we let GM know that some Californians are willing to pay for clean diesel-powered Saabs?

  12. Could the BioPower cars be detuned to output the same power as when running on petrol and have less of hit on fuel consumption?

    Selling BioPower to the world at large on being green doesn’t require that extra horsepower.

  13. I believe I said it before, but here goes again:

    E85 won’t fly in the US because we are either too stupid or too stubborn to adopt it. We have been raised on a “get more bang for your buck” mentality.

    If a dealer tries to sell an E85 vehicle to a customer and tells them they will get less MPG, they won’t buy it. Sure it’s great for the environment, but they won’t take the hit on mileage. Only those who have dispensable income or REALLY care about the environment can make a decision like that.

    Turn it around now – a dealer says, hey this diesel will get 50-60 MPG, but the initial cost are a little more. Who wouldn’t buy it?

    My point – GM should be concentrating on diesels, not E85.

  14. E85 will never catch on because it’s going to raise the cost of -everything- Americans enjoy for a moderate emissions benefit. Corn goes into a ton of things including feed for cattle. Beef and milk prices are already going up due to the higher price of corn. People think ‘corn is cheap ethanol should be cheap’ but that’s simply not how the world works. Higher demand equals higher prices when the supply is limited.

  15. Since the declaration of independence the USA produces more agricultural products than they can consume. This has always kept prices low and exports have ruined farmers in all parts of the world.
    That is why I do not see a problem in raised prices for corn. Mexican farmers can start to grow corn again profitably. They stopped that when Mexico entered the NAFTA. And mexican people need not to be hungry.
    If production of bio-fuels is not made in a “sustainable” way everywhere it will help to make this transparent to the consumer and offer choices. Alternativley a tax on ethanol from these sources is justified.

  16. As I’ve said before in previous comments to other posts, I happen to live in an ethanol-rich state (Wisconsin) and I know of at least 2 E85 pumps located within 2 km of my house — so if Saab is thinking about bringing BioPower to the US, they probably want to only target specific regions where an E85 infrastructure is already in place (not California, and not the Northeast US — which I assume are the 2 biggest “Saab regions”). On the other hand, a diesel infrastructure is obviously in place across the entire US, so maybe a focus on TTiD would better serve Saab for the US market as a whole?

  17. Its amazing how much diesel is being burnt to get low BTU ethanol to the various “green” markets. Makes as much sense as water in small plastic bottles from Fiji.

    Talking with Saab execs last month, they would like nothing better than to start selling TTids here tomorrow. Although current NOx specs on light-duty diesels is overly restrictive, whats even worse is the lameass quality of the diesel here. Yeah its ULSD, but modern Ds need cetane ratings pushing 50, and we are still stuck in the very low 40s. And its time to see those often missing stickers show up on the pumps. Where are EPA, CARB and the state Dept of AGS on this?

    Oops this was supposed to be about ethanol.

  18. I had a 2002 Ford Ranger V6 that was E85. I had no idea what that was when I purchased it. In the 2 or so years that I owned it I never once saw an E85 pump in Las Vegas or Atlanta or on the cross country trip. I grew up in the corn state of Iowa where my hometown just had an ethanol plant built. The farmers love ethanol, however the price of food going up with the price of gas isn’t a good solution. I now there are many other ways to produce ethanol, such as switch grass. Switch grass contains more energy and when was the last time you wanted to eat that!!! I bought my first SAAB to save gas from that truck. I think SAAB should stick with E85 along with developing other new clean technologies.

  19. I think the point of this post was that although SAAB seems to be onto ethanol for all the right reasons, it’s going to be hard to sell to an American public when in the past the push by the automakers for ethanol has been a self-interested effort to jump through the CAFE loophole.

    GM and the other U.S. automakers (and Nissan and Mercedes) have made things hard on SAAB in the U.S. by only offering vehicles for which the use of E85 would only bring the owner to a disadvantage.

  20. ehall, believe it ir not but the model T was designed to run on ethanol but GM had in interest in standard oil and made sure that was what cars ran on.
    Any product that is produced from crops that could have been used for food is going to have a very negative image. Yes Saab are going the right way and 1.4 or even 1.2 Turbo with energy saving gadgets ala BMW will be a benefit to the planet. The problem is the other car makers, how they use the fuel and how it is grown.
    If done right bio fuel could be a cash boon to some of the poorest countries in the world and the money could be used to ease global poverty and help end starvation. Or it could line the pockets of shareholders.

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