Blazing a Trail for Alternative Fuels

President Bush is renewing a call for the country to ease dependence on foreign oil. Specifically, he wants more investment in alternative fuels, such as ethanol. What will it take to turn that vision into reality?

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President Bush wants the nation to cut its use of gasoline by 20 percent in the next decade. In his State of the Union address, he called for a sevenfold increase in the production of alternative fuels. NPR's Kathleen Schalch reports on what automakers and ethanol producers say it will take to turn this vision into reality.

KATHLEEN SCHALCH: President Bush says he's serious about switching away from imported oil.

President GEORGE W. BUSH: This is government mandate that says we'll be using 35 billion gallons of alternatives fuels by 2017. This is a firm statement.

SCHALCH: He told workers at a DuPont research facility in Delaware on Wednesday that his goal is feasible. He pointed out that ethanol production has already jumped and could accelerate in the future. Ethanol producers are optimistic too.

Mr. BOB DINNEEN (President, Renewable Fuels Association): It is absolutely an achievable goal.

SCHALCH: But Bob Dinneen, president of the Renewable Fuels Association, admits that it will also be a stretch. Today, the U.S. makes only five billion gallons of ethanol per year.

Mr. DINNEEN: With the plants that are under construction, within another two years we'll add another six billion gallons on top of that. So we will be at 11 billion gallons of ethanol, primarily corn derived ethanol, within a very short timeframe.

SCHALCH: That's about a third of what the president wants. But there's a limit to how much corn and other grain the country can burn as fuel. Ethanol production is already pushing up corn prices and experts believe half of the annual target of 35 billion gallons of alternative fuel will need to come from something other than grain. President Bush and many others are pinning their hopes on cellulosic ethanol that could be brewed from straw, corn husks or switch grass. Scientists and investors are racing to perfect the chemical processes to do this. But so far no one's built a commercial cellulosic ethanol plant. One problem, Bob Dinneen says, is the cost, easily five times the price of a plant that makes ethanol from corn.

Mr. DINNEEN: And those costs will surely come down once the technology's been proven. So there'll be a long line of companies willing to be the third or fourth plant, but the first couple are going to be very difficult.

SCHALCH: There are other hurdles. Today ethanol is mostly used as an additive. Only three percent of the cars and trucks in the country can run on E85 fuel, the blend made mostly of ethanol. And most owners of these so-called flex fuel vehicles never put E85 in them anyway. One reason is the tiny number of gas stations that even sell it.

Beth Lowery, General Motors' vice president of environment and energy, says this is changing.

Ms. BETH LOWERY (General Motors): I don't view it as a chicken and egg anymore. There's more than six million vehicles that are on the road today and we're increasing the number of stations. So I think it really is a matter of deciding that we really, as a country, want an alternative to petroleum.

SCHALCH: Lowery says GM already plans to ramp up production of flex fuel vehicles every year.

Ms. LOWERY: We'll double production by 2010. And we've also discussed increasing 50 percent of our production to be biofuel capable if the supporting infrastructure and policies are in place, which are very important in making sure we have the incentives and that customers can go to the local gas stations and get E85 ethanol.

Unidentified Man: You get 30 miles per gallon or more on the highway.

SCHALCH: Ford and Chrysler also say that with the right government policies, half of their new cars and trucks could be capable of running on ethanol or other biofuels by the year 2012. To encourage increased production of biofuels, the government already offers generous incentives to automakers, refiners and gas station owners. But policy makers will have to decide how much to spend subsidizing alternative fuels and which ones to promote if they really want to reduce gasoline consumption. Kathleen Schalch, NPR News, Washington.

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