(March 7, 2012) Washington – President Obama has made fuel efficiency and alternative vehicles staples of his energy policy by establishing increasingly stringent Corporate Average Fuel Economy (CAFE) standards and investing in alternative vehicle and fuel infrastructure.  Efficiency and alternative fuel vehicles are key elements in extending fuel supplies and making better use of the resources America has at its disposal.

In so doing, much emphasis has been placed on electric vehicles.  Such vehicles certainly have a role to play in America’s vehicle mix, as do other alternative fuel vehicles running on natural gas, propane, and other fuels.   So, too, do flex fuel vehicles (FFVs)  capable of running on a wide range of ethanol blends – the most abundant, renewable, and domestic alternative to gasoline available today. 

“The President’s plan outlined today is the kind of initiative needed to expand fueling options available to American consumers,” said Renewable Fuels Association President and CEO Bob Dinneen.  “We look forward to working with the Obama Administration to implement this initiative, increase the proliferation of FFVs, and build upon the work of Agriculture Secretary Tom Vilsack and the U.S. Department of Agriculture to install 10,000 blender pumps across the nation.” 

But, when it comes to the issue of fuel efficiency, it is important to note that today’s current internal combustion engine and its need for liquid transportation fuel will continue to represent the lion’s share of the vehicle and fuel markets for the foreseeable future. 

This fact is critical in understanding how automakers will comply with increasing CAFE standards.  A recently released analysis from auto engineering firm Ricardo notes, “[t]he vast majority of vehicles sold through 2025 in the United States will use gasoline-fuelled, spark-ignited internal combustion engines as the primary form of propulsion.”  This is significant because CAFE standards are set to rise to 54.5 miles per gallon in 2025.  Ricardo reports that nearly 3 out of every 4 vehicles will require a gasoline-type, higher octane fuel to operate a growing list of engine technology options.

Specifically, downsized, turbo-boosted engines designed to increase fuel efficiency in compliance with the CAFE standards will require higher octane fuels than those available at the pump today.  Of the current liquid transportation fuels widely available, only ethanol offers high octane at a cost-effective price.  With a blending octane rating of 113, ethanol and higher ethanol blends are uniquely poised to help automakers achieve stricter fuel economy and emissions requirements. While most measure a fuel’s mileage based on British Thermal Units (BTUs), new engine technologies designed to meet higher fuel economy standards like turbo-boosted, downsized engines will require the higher octane level that higher level ethanol blends offer.

Even the auto industry’s top trade association agrees.  In comments to the U.S. Environmental Protection Agency on pending vehicle and fuel guidelines known in the industry as Tier3/LEV III, the Auto Alliance noted, “to help achieve future requirements for the reduction of greenhouse gas emissions, we also recommend increasing the minimum market gasoline octane rating, commensurate with increased use of ethanol. Adding ethanol to gasoline increases its octane rating.”

As the RFA noted yesterday in an Issue Brief on gasoline prices, the high octane rating of ethanol allows gasoline refiners to produce a sub-octane gasoline for blending with ethanol.  Once blended, the new fuel meets the octane requirements for sale.  Given that achieving the kind of octane needed through gasoline alone would require significant additional refining and cost, expanding the use of ethanol to meet octane needs for new turbo-boosted, downsized engines designed for greater fuel efficiency could satisfy the technical needs of the engines while helping keep gasoline prices down.

“By necessity, America’s vehicle fleet in the future will feature a wide range of technologies and must include an increased reliance on flex fuel engine technologies,” said Renewable Fuels Association President and CEO Bob Dinneen.  “With demand for liquid, gasoline-type transportation fuels remaining high for the foreseeable future, high octane, high performing renewable fuels like ethanol can provide a clear path forward to meeting America’s desire to reduce oil consumption through improved efficiency while doing so in a cost-effective way for consumers.”

An executive summary of the Ricardo analysis can be read here