Source: Reuters
By Roberto Samora and Reese Ewing
SAO PAULO, June 21 (Reuters) - U.S. automakers oppose raising the blend of ethanol in gasoline from the current 10 percent, saying cars won't run as well on higher blends, but Brazil's experience shows their arguments are weak.
Brazil, a model in the biofuels industry, began its ethanol program in 1975 after the world oil crisis sent its economy into a nose dive. The country was importing about 80 percent of its crude at the time.
It now mandates 20 to 25 percent ethanol in all gasoline and its auto industry adapted engines to the more corrosive fuel in 1979. Ethanol now holds equal market share as gasoline and sales of cars that run on it are booming.
The U.S. Environmental Protection Agency and Energy Department are studying the potential impact of an increase of ethanol in gasoline to 15 percent.
U.S. ethanol producers say this would expand demand and improve the health of the industry, suffering from a glut of the biofuel typically made from corn in the United States.
But the U.S. Alliance of Automobile Manufacturers has lobbied against raising the blend, saying it would affect vehicle emissions, performance and durability.
Emissions are complicated as there are many gasses and particulates produced to varying degrees depending on the blend and the quality of gasoline and type of ethanol. Some are worse than others for humans and the environment.
But as for performance and durability, Brazilian engineers say local cars that run on E20-E25 gasoline are in no way inferior to their North American counterparts.
"From the technical point of view, this could be done without any difficulty (in the United States)," former Brazil Chief Executive for Ford (F.N) and current Director of the Center for Automotive Studies Luiz Carlos Mello said.
He noted that U.S. automakers were instrumental in designing the 100 percent ethanol car that started rolling off Brazilian factory floors three decades ago.
"But it's not an easy decision, for if it were just a matter of economics, they would have already made it," he said, adding that there were broad political implications with the U.S. economy, which is heavily geared toward petroleum.
For years, some car manufacturers have been producing parts and vehicles in the United States with more corrosion-resistant metal alloys, such as stainless steel to handle higher blends of ethanol.
"I'd say that some manufacturers already can handle 15 percent ethanol, so I think they would have to do very little," said Fernando Barata, an engineer who was instrumental in the development of Brazil's flex-fuel car that runs on any mixture of ethanol or gasoline.
But the U.S. industry overall is likely to have to invest in the reworking their production lines, parts and testing.
"It would be impossible to speak of costs, beyond a true shot in the dark, but it could be something more or less significant," Heymann Leite, an engineering professor at various universities in Brazil.
The necessary part design and technologies for E15, however, are already being used in Brazil by the very same automakers operating in the United States, such as General Motors [GM.UL], Fiat (FIA.MI), Volkswagen (VOWG.DE) and Ford.
Mello added that the U.S. auto industry's additional costs of modifying their production lines for higher blends would be diluted by the massive scale of U.S. production.
