A little-noticed provision in the House energy bill provides a key concession to major automakers, allowing them to take credit for producing vehicles that run on ethanol even if owners are using regular gas.
The measure, which makes it easier for manufacturers to meet federal fuel economy requirements, underscores the problems lawmakers encounter when trying to promote alternative fuels. While U.S. officials have been trying to spur a broad market for "flexible-fuel vehicles" that can run on gas or an ethanol blend, some studies suggest that this policy has increased domestic oil consumption over the past decade.
The flexible-fuel credit, which is set to expire in 2008, would be extended for six years under language adopted by the House on April 21. It allows car makers to get credit for fuel economy for flexible-fuel vehicles even if owners never use anything but gas.
The Natural Resources News Service, a nonpartisan organization that focuses on environmental issues, provided the bill language to The Washington Post.
Senators are weighing whether to include the measure in the energy bill that will reach the floor later this month.
Rep. Joe Barton (R-Tex.), chairman of the House Energy and Commerce Committee, said in a statement that the credit reflected a "balanced approach" to energy consumption that "will help alleviate our reliance on foreign oil and achieve a cleaner environment."
But environmentalists such as David Friedman, research director for the clean vehicles program of the Union of Concerned Scientists, countered that, since its inception in 1993, the flexible-fuel credit has allowed manufacturers to avoid $1.6 billion in federal fines and U.S. gasoline consumption to increase by 4 billion gallons.
"We have no problem with the automakers getting credit for the alternative fuels actually used in vehicles, because that's a good thing," Friedman said. "This pretends that they're selling hybrids when they're selling gas guzzlers."
In 2002, a National Academy of Sciences study concluded that the flexible-fuel credit "has had, if any, a negative effect on fuel economy, petroleum consumption, greenhouse gas emissions and cost. These vehicles seldom use any fuel other than gasoline, yet enable automakers to increase their production of less fuel-efficient vehicles."
However, the program remains popular on Capitol Hill with both Democrats and Republicans, particularly those from car- and ethanol-producing states. Gloria Bergquist, spokeswoman for the Alliance of Automobile Manufacturers, said the policy addressed the "chicken and egg problem" of how to make renewable fuels more accessible to consumers.
"The refiners say they're not going to produce clean fuels until there's autos to use them, and the automakers say, well, we need the clean fuels if we're going to manufacture these clean vehicles," Bergquist said in an interview.
Under current law, companies that produce flexible-fuel vehicles get credit for meeting fuel standards as if car owners drive half the time with an 85 percent ethanol fuel blend. This rarely happens. According to federal officials, drivers use a blend less than 1 percent of the time, and less than 0.2 percent of U.S. gas stations sell the appropriate fuel.
But auto companies still reap the benefits as if drivers were exercising the blend option. In 2004, Ford sold more than 240,000 six-cylinder Ford Explorers, 87 percent of which were dual-fuel vehicles. That meant the company got credit for the sport-utility fleet averaging nearly 31 miles per gallon, while it actually averaged closer to 20 miles per gallon.
"It's a special-interest provision that benefits the automobile manufacturers, based on a pretense," said Rep. Henry A. Waxman (Calif.), who, with other energy committee Democrats, tried unsuccessfully to strip the provision from the energy bill.
Some U.S. manufacturers are trying to educate customers about using alternative fuels. General Motors Corp. funded a mailing to Sioux Falls, S.D., residents informing them that a local ethanol producer, VeraSun Energy, had installed 35 ethanol gas pumps in the city.
But most flexible-fuel vehicle drivers remain unaware that they can switch from gas. In a recent survey of owners in South Dakota, VeraSun found that 68 percent did not know they could use ethanol in their vehicles.
"We have a lack of awareness," said Doug Durante, executive director of the Bethesda-based Clean Fuels Development Coalition. But he predicted that ethanol sales were on the verge of taking off. "This is a very slow start, but it's a steady market. I just think it's the future."