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Paper 1 - E85

The domain that I chose to examine for the semester is alternative energy storage for
transportation, specifically the technology of E85 as a primary fuel. This technology is
interesting because it is one of the few alternative fuels, which reduces the dependency on oil
and reduces greenhouse gas emission but does not require a large change to the current
infrastructure. E85 is a blend of fuel that is comprised of 85% ethanol, generally derived from
corn, and 15% traditional gasoline. Because E85 has similar characteristics to gasoline,
companies can easily integrate it into the current fuel supply system and consumers can convert
older vehicles to E85 for at a relatively small cost. Additionally, several automakers produce
vehicles with standard engines capable of operating with either E85 or gasoline. This
technology is also significant because it has begun to proliferate into the marketplace. Even the
Indy Car Series races, including the Indianapolis 500, have begun to use ethanol to fuel their
The increase in the price of gasoline and the uncertainty of foreign oil imports from
unstable areas of the world makes this technology more significant in the United States.
Current gasoline utilizes approximately 10% ethanol because this qualifies the gasoline to an
exemption to a federal gasoline tax. If E85 became the standard fuel for America, we could
reduce the amount of gasoline required by 75% and replace this with ethanol. This equates to a
savings of over 2.5 billion barrels of gasoline annually.1

Technology Parameters
Several key parameters characterize this technology. Most vehicles have different fuel
efficiencies which have changed over time; I used the CAFE standard for 2000-2008 of 27.5
miles per gallon as a baseline for comparing the two technologies. The key parameters for
energy storage for transportation are: cost, horsepower, greenhouse gas emission, distance
between re-fuels, weight, fuel tank volume required, and the supporting infrastructure.
The cost parameter can be broken down into initial costs and operating costs for the
consumer. One aspect of this technology which makes it interesting is the low initial cost for the
consumer to purchase a vehicle which can run on E85. Currently there is little to no cost
difference between vehicles which run on gasoline and those that run on E85. Table 1
compares several vehicles which are currently on the market that have E85 capable engines as
standard options. Table 1 also presents the horsepower of several of these vehicles, which the

Energy Information Administration, US Product Supplied,
<> (18 FEB 09)

Paper 1 - E85

use of E85 increases. Additionally, users of older vehicles can purchase conversion kits to E85
for around $450, which include new fuel injectors and gaskets required to use E85.2
Vehicle City MPG HWY MPG Horsepower MSRP
F150 (Gas) 14 18 310 $ 35,710
F150 (E85) 10 13 320 $ 35,710
Impala (Gas) 18 29 $ 24,550
Impala (E85) 14 21 $ 24,550
Avalanche (Gas) 14 20 310 $ 36,410
Avalanche (E85) 10 15 326 $ 36,410
Table 1: Vehicle Comparison

The second aspect of cost is the recurring cost for fueling vehicles. Generally, E85 has
a lower price at the pump when compared to gasoline, which makes it appear as an attractive
alternative. The price of E85 varies by location in the United States. In areas where corn is
readily available, such as the mid-western section of the United States, companies can easily
produce and transport ethanol. This makes E85 more propionate in these areas because of
lower prices. At the national level, E85 costs are closer to gasoline pump prices because of the
transportation costs to distribute the fuel to the coastal regions. However, E85 vehicles have a
decrease in fuel efficiency of between 20-30% from traditional fueled vehicles.5 This decreased
efficiency negates any savings from the pump price of E58 as shown in Figure 1.

Costs Over Time

Average Cost (cents/mile)

8.00 E85 Mid
6.00 West
2000 2005

Figure 1: Costs Over Time

E85 Conversion Kits, <>, (16 FEB 09)
Ford Motor Company, F150,<> (17 FEB 09)
General Motors Company, Chevy Vehicles, < > (17 FEB 09)
US Department of Energy, "Flex-Fuel Vehicles", (13 FEB 09)
US Department of Energy, Average Fuel Price Report, <> (13
FEB 09)

Paper 1 - E85

Technology Trade-offs
A separate parameter that I examined was the average distance between re-fuels. This
parameter is dependent on the tank size and affects the weight of the fuel required to increase
distance. Also, the reduction in fuel efficiency between E85 and gasoline has a significant
impact on the amount of fuel required to travel the same distance. Figure 2 presents the
tradeoff between tank volume and distance traveled. The important take-away from this chart is
the difference between E85 and gasoline. For example, to travel 400 miles between refuels, an
E85 vehicle would require almost an additional 5 gallons of fuel.

Tank Volume
Fuel Tank Size (gal)


20.0 Gas

0.0 E85
0 200 400 600 800 1000
Distance Between Re-Fuel (miles)

Figure 2: Tank Volume Tradeoff

An additional aspect is the weight of the fuel required to travel a given distance. First,
E85 weights 6.59 lbs/gallon, which is 0.44 lbs/gallon more than gasoline.7 This characteristic of
E85 amplifies the effect that decreased fuel efficiency has on vehicle weight. Figure 3 presents
the tradeoff between distance between re-fuel and the required fuel’s weight.

Fuel Weight
Fuel Weight (lbs)

0 200 400 600 800 1000
Distance Between Re-Fuel (miles)

Figure 3: Fuel Weight Tradeoff

US Department of Energy, "Fuel From Farms: a Guide to Small Scale Ethanol Production,” May 1980

Paper 1 - E85

When I evaluated the key parameters and tradeoffs for this technology, E85 does not
appear to be an attractive alternative fuel to gasoline. However, some aspects of E85 make it
attractive to consumers. First, when using E85, vehicles reduce CO2 emissions by around 6%.8
Also, the current fuel distribution system is easily adapted to distribute E85 gasoline. Oil
companies can convert current pumps and distribution vehicles to support E85 by changing the
rubber gaskets to a composite, which E85 deteriorates because of its higher alcohol content.
This is by far the most significant advantage of E85 over other forms of alternative fuels.

Technology Progression
From the data gathered thus far, it appears that the technology for E85 vehicles has
progressed as the same rate as that of gasoline fueled vehicles. However, as shown in Figure
1, this progression has not allowed E85 to surpass gasoline when evaluated in cost per mile
driven. Although E85 vehicles continue to become more fuel efficient, they are improving at the
same rate as gasoline vehicles. The innovation trajectory for this technology is most evident
Indy car racing. Because ethanol has a higher octane rating than methanol and gasoline, it is
much more efficient for Indy cars which engineers optimized to run on high octane fuels.9 If
companies can transfer the technology from Indy cars to consumer vehicles, it is possible to
surpass gasoline in performance. However, car manufactures would have to optimize
performance to E85’s increased octane and resulting increased compression ratios.

Competing Technologies
The wide variety of competing technologies is another aspect which makes E85 an
interesting and important technology. This paper evaluated E85 against the incumbent
technology, gasoline. However, there are several other technologies which are competing to
become the dominate energy storage technology for transportation.
The technology that will most likely compete with E85 for market share is hybrid electric
vehicles. Companies have developed several types of electric vehicles to compete in this
market. These are not new to the market place and took part in the initial competition for
powering vehicles in the early 1900s. These vehicles use batteries to story energy and vary
from hybrid electric-fuel vehicles to pure electric plug-in vehicles. Like E85, the major
advantage of this technology is the use of the current infrastructure to support transportation.

National Renewable Energy Laboratory, “Light-Duty Alternative Fuel Vehicles: Federal Test Procedure Emissions
Results” Golden, Colorado, September 1999. (16 FEB 09)
Indy Car Series, “Going Green” (18 FEB 09)

Paper 1 - E85

Hybrid electric vehicles use standard gasoline and plug-in electric vehicles utilize the current
electric grid. The major disadvantage of these technologies is the high initial cost of the vehicle,
which takes approximately six years to offset with fuel savings. Additionally, the large batteries
required for this technology present an environmental concern when their life-cycle ends and
they must be disposed of.
Other technologies which use alternative fuels as well as modified engines to power
vehicles will also compete against E85. Examples of these technologies are compressed
natural gas (CNG) and hydrogen. There are several disadvantages for these technologies.
First, these technologies require a completely new support system to deliver and distribute the
fuel. Also, because they are compressed gasses, they require a large container to store energy
required to travel long distances. However, they do produce substantially less greenhouse
gasses when compared to traditional fossil fuels. Hydrogen fueled vehicles produce no
greenhouse gasses from operation. CNG is a very good alternative for vehicles which can
travel a short distance between refuels and have a specific support system, which makes it
extremely attractive for urban mass transit systems.
Additionally, bio-diesel is a technology similar to E85 that is a replacement for traditional
diesel. This technology could have a symbiosis relationship with E85, in which the technologies
support each other’s growth.10 Like E85, bio-diesel makes use of organic material to
supplement diesel fuel. Consumers can made it from something as simple as left-over cooking
oil from fast food restaurants. This technology is similar to E85 in that it requires very small
initial costs and the existing support system can support this fuel. However, like E85, there is a
decrease in fuel efficiency and there are temperature limitations for some versions of bio-diesel.
Similar to traditional diesel and gasoline vehicles, it is unlikely that bio-diesel will compete
directly with E85. However, if the efficiency of one technology shows a large improvement,
market share could shift to one or the other.

Technology Evolution
There are two major areas where E85 could evolve during the next decade. There is an
obvious need for efficient alternative sources of transportation fuel. This will drive the innovation
and evolution of all of the technologies competing for this market share. For E85 to become
successful it must increase its fuel efficiency to compete with gasoline for cost per mile traveled.
With the innovations in Indy Car racing, I believe it is possible to optimize engines and vehicles
to run on E85 to increase this efficiency. E85 could reach a natural technological limit because

C. Pistorius and J. Utterback, “Multi-mode interaction among technologies,” Research Policy 26, 1997, 76.

Paper 1 - E85

of the laws of thermodynamics. E85 has lower energy content than gasoline, so it is inherently
less efficient. But manufacturers are using E85 in engines that they designed to burn gasoline.
So, as E85 becomes a more predominate alternative to gasoline, car manufacturers could
optimize engines to run on E85 and reduce the 20-30% decrease in efficiency from gasoline.
The process for producing E85 also has potential for improvement. E85 has not fully
experienced the traditional switch from product improvement to process improvement.
Currently there is a large controversy over the use of E85 and other bio-fuels because it takes
more energy to produce a gallon of E85 than it would to just use a gallon of gasoline.
Alternative energy sources, such as wind and solar could be used to produce E85, which would
make it a truly green technology. If E85 could improve in these two areas, it will be a strong
competitor in the market.

E85 is a viable alternative fuel. Although the current cost per mile traveled is higher than
gasoline, several aspects of E85 make it an attractive alternative. The most important aspect of
the technology is that it utilizes the current supporting systems for distribution and delivery to the
customer. Second, it produces about 6% less CO2 than gasoline which supports the current
trend to slow global warming. Additionally, it relies on less oil which supports the political trend
to decrease dependency on foreign oil. As the technology of E85 evolves, both from a product
and process perspective, manufacturers could reduce the cost per mile traveled to a point
where it becomes more attractive than gasoline.