Obama’s Fuel Efficiency Standards a Blow to E-85

President Barack Obama’s tough fuel economy program for vehicles could put another damper on the struggling ethanol business, because the alternative fuel packs lower energy content than gasoline, according to Reuters. Obama on Tuesday introduced the most aggressive proposal yet to boost U.S. auto fuel economy standards. The proposal would require passenger vehicles to average 35.5 miles per gallon by 2016, which will pose a major problem for E85, a blend of 85 percent ethanol and 15 percent gasoline. The proposal would also put a damper on flex-fuel vehicles that are capable of running on E85.  Flex fuel cars typically get 20 percent to 30 percent fewer miles per gallon when they burn E85 due to ethanol’s lower energy content. Obama’s plan is also a blow to the ethanol industry’s wish for the federal government to hike the ethanol blend in gasoline from 10 percent to up to 15 percent, unless the auto industry makes specially-built engines that overcome the mileage difference. This is viewed as unlikely due to the dire straits of the auto industry.