Despite state efforts, ethanol fails to gain against gasoline in Georgia

ATLANTA - State efforts to make ethanol a convenient and profitable alternative to gasoline are having limited success.

 

In 2007, legislators passed a pair of laws to encourage the manufacture and sales of E85, a blend of 15 percent ethanol, because lawmakers saw fuel made from plants like pine trees as a solution to multiple problems.

"The General Assembly finds and declares that facilitating E85 [would provide] improved air quality in this state through reduction of combustion of gasoline in motor vehicles; aid compliance with federal air-quality standards; promote the use of alternative domestic fuels that reduce dependence on foreign petroleum supplies; and enable increased availability of motor fuels crucial to the state's economy, welfare, and public safety, which may be especially critical in times of natural disaster or international crisis," one of the laws states.

The first measure removes the sales tax on materials used in the construction of factories that manufacture ethanol in Georgia. However, the tax break hasn't been enough to prevent several of them from failing, most notably the recent news that First United Ethanol is struggling with $100 million in debt.

A second law has resulted in grants totaling $452,000 that to allow retailers to install the specialized pumps required for E85.

"Georgia's E85 grant program has expanded the availability of E85 across the state," said Shane Hix, director of public affairs for the Georgia Environmental Facilities Authority, which distributes the grants. "Through the state program alone, E85 pumps at 23 filling stations have opened, helping to increase the number of stations offering E85 from only four stations just two years ago."

However, the state hasn't added cars equipped for E85 to its fleet since there are still too few pumps dispensing it.

"That's why the state doesn't use that many of them," said Brad Douglas, commissioner of administrative services, which manages the state's motor pool.

But even where E85 may be plentiful, the Department of Administrative Services doesn't encourage agencies to buy ethanol-compatible vehicles.

"We've done the analysis, and E85 doesn't pay for itself," Douglas said.

What about the state's strategy to develop an alternative-fuels industry?

"That's where policy doesn't meet reality," he said.

walter.jones@morris.com, (404) 589-8424

 

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