Wednesday, September 13, 2006

Dual-Fuel Vehicles Open Mileage Loophole for Carmakers

Dual-Fuel Vehicles Open Mileage Loophole for Carmakers

As car companies promote E-85 as an alternative to gasoline, they are benefiting at the same time from a loophole that allows them to receive credits toward environmental standards when they sell flexible-fuel vehicles that run on the ethanol-based fuel.

Such vehicles get credit from the government for nearly double the gas mileage that they actually achieve. This generous mileage appraisal has another advantage. It allows manufacturers to sell more full-size sport utilities and pickups while still meeting the federal standards for average fuel economy.

Those credits go to the carmakers whether or not the flexible-fuel cars ever see a drop of ethanol in their tanks.

The rule has been especially helpful to the car companies in reaching the required annual standard for the light truck category, which includes vans, pickup trucks and sport utility vehicles.

While the average fuel economy requirement for domestically produced sedans has remained stable at 27.5 miles per gallon since 1990, the standard for light trucks has been getting tougher.

Next year it will go from 21.6 miles per gallon to 22.2, and then it will climb a half-mile per gallon for the next four years.

The environmental credits that the carmakers can apply for are capped at 1.2 miles per gallon per fleet. Last year’s energy bill, which supported the production of alternative fuels like ethanol, held in place the cap on credits until at least 2010, said Peter Feather, the fuel economy division chief at the National Highway Traffic Safety Administration, which regulates the program.

Of the 18 flexible-fuel vehicles General Motors is offering for the 2006 and 2007 model years, only 2 are sedans: the Chevy Impala and the Monte Carlo. The rest are pickup trucks and sport utility vehicles.

DaimlerChrysler, after offering two sedans and only four light trucks in 2006, has said it will make only one sedan, the Chrysler Sebring, and nine light trucks for 2007. Only Ford has the opposite mix, producing one dual-fuel truck (the F-150 pickup) and three dual-fuel sedans in its 2006 and 2007 models.

As a result, environmentalists contend that the overall efforts by car manufacturers to promote E-85 are somewhat hypocritical.

“Ethanol should be saving us twice as much oil as it is today because we are letting really big, inefficient flex-fuel vehicles on the road,” said Nathanael Greene, senior policy analyst at the Natural Resources Defense Council, a supporter of both ethanol and E-85. “There is still no incentive for the auto industry to actually get consumers to use this fuel.”

“The credits are a motivating factor” in building more trucks in the flexible-fuel category, Mark Kemmer, a General Motors spokesman, said. But he said the carmaker was building the vehicles that were most popular with farmers and others in the Midwest, where most of the E-85 fuel is available.

Converting a vehicle to dual-fuel use costs manufacturers at most a few hundred dollars more per car, former and current G.M. officials say. The conversion entails upgrading components, like fuel tanks, hoses and fuel injectors, to withstand the corrosive nature of ethanol. It also requires upgrading computer capacity and more engineering and validation work by lab technicians.

Susan Cischke, vice president for environmental and energy engineering at Ford, said: “It’s double the work. We have to certify for gasoline and for flexible fuel.”

But it is less work than another alternative. It costs an extra $3,000 to $4,000 to manufacture hybrid vehicles that run on electric motors powered by a mix of batteries and a gasoline engine, Mr. Feather said.

Copyright 2006 The New York Times Company


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