Successive press releases by GM on February 6 and 7, 2008, make it clear the company is committed to producing many more E85 capable vehicles and even producing ethanol itself via a joint venture with Coskata, Inc, a private company, starting in 2010. 

GM states that if the three American manufacturers, GM, Ford, and Chysler, meet their goals for the number of E85 cars they will sell by 2020, they could jointly achieve a reduction of 29 billion gallons or 18% in the U.S. use of gasoline.   Of course, that amount would not include diesel fuel used in cars and trucks. 

Coskata is apparently planning to use a mixture of "renewable" feed-stocks to produce their ethanol.  They seem to be committed to a cellulosic process, not simply using food-based inputs such as corn.  Production is scheduled to start in 2010.

The GM announcement comes one day after analyst Charles Maxwell predicted that peak oil will occur in 2012 and that oil production will decline significantly by 2015, resulting in substantial economic dislocations.   Depending on how energy efficient of GM-Coskata process turns out to be, their efforts could come in very handy around that time. 

On the other hand, a recent report in the Oil and Gas Journal stated that ethanol use in the U.S. would be almost impossible to expand beyond 10% of gasoline consumption primarily because of distribution difficulties inherent to the technical properties ethanol.  That point of view may be petroleum-centric and off the mark.  Or, GM may be kidding themselves.

Foreign car producers, who are increasingly dominating the U.S. and international car markets, have shown little enthusiasm for ethanol.  Instead, these growing companies are concentrating on hybrid and plug-in hybrid technologies, along with diesel fuel.  Ethanol provides only 70%-80% of the mileage of gasoline while diesel provides 120% or more. 

Here are press reports of the two GM announcements:

1.

GM to Expand Its Ethanol Capability

ASSOCIATED PRESS
February 7, 2008; Page D7

General Motors Corp. said half of its U.S. vehicle volume will be able to run on ethanol by 2012, just as partner Coskata Inc. is expected to be ramping up ethanol production.

In a speech at the Chicago Auto Show, GM North America President Troy Clarke said GM will have 11 ethanol-capable vehicles on the market this year and 15 in 2009. Mr. Clarke also announced that GM will be producing its first four-cylinder ethanol-capable model, the FlexFuel Chevrolet HHR, in 2010.

"We don’t only want to respond to the needs of the market. We want to anticipate them," Mr. Clarke said.

Mr. Clarke also said that Warrenville, Ill.-based Coskata, which announced its partnership with GM in January, has formed an alliance with ethanol-plant engineering firm ICM Inc. to build its first plant, which is expected to open in late 2010.

Coskata President and Chief Executive Bill Roe said the company plans to announce the location of that plant and another plant in the next few weeks, and construction on both will start this year. ICM’s production process currently is being used for half of all U.S. ethanol production.

Coskata said it will be able to mass-produce ethanol at the plant for less than $1 a gallon using a unique process that converts feedstock, biomass, agricultural waste and even municipal solid waste to ethanol.

Mr. Clarke said GM is continuing to research hybrids, plug-in electric vehicles and other fuel-saving technology, but believes ethanol can provide the quickest reduction in emissions. The U.S. already has a fueling infrastructure for ethanol, and consumers would have to make minimal changes in behavior, he said.

He said that if GM, Ford Motor Co. and Chrysler LLC meet their promises for the number of ethanol-capable vehicles they will have on the road by 2020, there would be a reduction of 29 billion gallons of fuel annually, or 18% of the country’s usage. GM now has 2.5 million ethanol-capable vehicles on the road and expects to have up to 20 million by 2020, Mr. Clarke said.

2.

February 6, 2008, 12:11 pm

GM Partner Coskata to Open Ethanol Plant

General Motors Corp.’s North America President Troy Clarke said the company’s ethanol partner, closely held Coskata Inc., will open an ethanol production plant.

“This makes sense and ethanol is a breakthrough technology,” Mr. Clarke said
Wednesday at the show.

GM Troy Clarke (Associated Press)

GM has an undisclosed financial stake in Coskata and is making a foray into the cellulosic ethanol field as part of a broader campaign to convince car buyers it is committed to fuel economy and capable of chasing Toyota Motor Corp. in terms of environmental leadership.

GM, which has been aggressively marketing ethanol as a way to complement its growing fleet of vehicles that can run on the fuel blend of 85% ethanol and 15% gasoline called E85, says it is also part of its “commitment to reinvent the automobile” by building vehicles that can run on a variety of sources, including hydrogen fuel cells and electricity.

Coskata said in a release that its first plant is scheduled to open in late 2010 and will be the staging ground for the world’s first mass-produced next-generation ethanol. Coskata plans to convert biomass into advanced biofuels from a number of renewable materials. – Jeff Bennett

Tags: energy investments

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