Tuesday, March 28, 2006

One word for the ethanol industry


I guarantee that if the ethanol industry can find a way for ethanol to provide more value to the average car owner, ethanol will win against gasoline in the marketplace without any government intervention. It ain't happening yet, though:
According to the fueleconomy.gov Web site, 35 FFV's (Flex Fuel Vehicles) exist in 2006 models. Each model receives less fuel economy in the ethanol version. For example, the popular eight-cylinder Ford Crown Victoria sedan is estimated to get 25 mpg on the highway with regular unleaded, but 18 mpg as a FFV. This is a 28 percent drop in gas mileage.

Lampert told United Press International it is necessary to account for this drop in fuel economy with a subsequent drop in price per gallon of fuel to entice users to buy. The price reconfiguration should be relative to the change in fuel economy, he added. For example, with the Ford Crown Victoria receiving 28 percent fewer mpg, the price per gallon of ethanol-blended fuel should be 28 percent cheaper.

Once this industry finds more cheaper, cleaner, and more efficient ways to produce ethanol and they address their supply issues, it may have a bright future-without government interference.

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