Adding E85 (Ethanol Based) Fuel Vehicles Is Advant

1941 words - 8 pages

Lotus Rental Car Company is exploring options regarding adding alternative fuel vehicles to its fleet. The Environmental Protection Agency defines alternative fuels ?as fuels that can replace ordinary gasoline. Alternative fuels may have particularly desirable energy efficiency and pollution reduction features. Alternative fuels include compressed natural gas, alcohols, liquefied petroleum gas (LPG), and electricity? (EPA, 2006). E85 fuel, a type of alternative fuel, is not the same as the 85, 87, 89, 91 or 92 octanes rated gasoline produced from oil seen at many gas pumps. E85 fuel is distinguished at the pump, specifically as ?E85? fuel and is an alternative fuel blend of ?85 percent ethanol, which comes from plants like corn, and 15 percent gasoline? (Mills, 2006). Specifically, adding E85 (Ethanol Based) fuel vehicles is advantageous to the Lotus Rental Car Company.Henry Ford designed the first ethanol cars in the 1880?s to run on ethanol or gasoline. In the United States, ethanol?blended gasoline accounts for more than 10 percent of the total gasoline purchases. Ethanol is a product of fermented plant sugars derived from corn, potatoes, wood, waste paper, wheat and many other agricultural products and food waste. It is essentially 100 percent pure grain alcohol that is unfit to drink (EPA, 2002).Lotus Rental Car Company faces several advantages for adding E85 fuel vehicles to the rental fleet. According to the Environmental Protection Agency, ethanol vehicles exhibit the same performance, payload acceleration and cruising speed as conventionally fueled vehicles. Consumers have a variety of choices with the availability of vans, trucks and luxury cars using E85 fuel (EPA, 2002).The U.S. government is committed to finding alternative fuel sources and offers incentives, which include tax breaks for the automobile manufacturers and oil companies who provide E85 fuel at the pump. The current incentive for producing ethanol is 10 cents per gallon tax credit for up to 15 million gallons produced annually (U.S. Department of Energy, 2006).The federal government offers a $2,000 tax credit per vehicle to consumers who purchase E85 fueled vehicles (Bioenergy, 2006). This tax incentive is a huge cost advantage to adding E85 fuel vehicles to the Lotus Rental Car Company.Technology is advancing in the production of ethanol-based fuels and less energy is consumed in the production of E85. New technologies have the capability of using all types of crop waste. One of the types of technology is called ?cellulosic ethanol.? Cellulosic ethanol uses the corn stalks left after harvest, grain straw, and quick growing trees like popular and willow to produce ethanol-based fuel. Cellulosic ethanol seems promising and experts hope that the technology will assist in reducing ethanol production costs (American Coalition for Ethanol, 2006).The availability of E85 fuel is also increasing. There are 98 ethanol plants nationwide with 17 plants currently under construction....

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