Thursday, August 10, 2006

Building a Bandwagon

Ok - I admit it. The issue has gone from one of those annoying news items you can't let go of to a honest to goodness cause. I looked around and couldn't find a bandwagon to jump on, so perhaps we need to simply build one.

Why would south central Wisconsin, or more specifically the 80th Assembly District, care about E85 and the Minimum Markup Law?

Beyond all the reasons you will hear from environmental and anti-oil groups about E85 burning cleaner, being cheaper, reducing our dependency on foreign oil, etc; here are the local reasons why it's a good move:
  • It supports a local start up industry in Monroe rather than wait for other industries from border states provide the same product.
  • It supports a major manufacturer's future goals. A manufacturer that is a key employer for the region. Given the cost of regular unleaded, I think the demand for a Chevy Blazer that can use E85 for $2 per gallon might just be popular and keep the assembly lines in Janesville moving for a while.
  • It supports the traditional backbone of our regional economy - agriculture. Did you notice all the corn we grow?


For good measure - here's a reason that the liberal interest groups might not think of -- E85 offers US auto makers a niche market at a time when Toyota and Honda threaten to dominate the market as the only aggressive hybrid car makers. E85 is currently being pursued by Ford and GM but not by Japanese companies (they are moving to electric/gas hybrids). Although hybrids will give a better MPG rating, they currently use regular full price gas. E85 could offer a much cheaper driving alternative that uses less petroleum than the current hybrids on the market.


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Edit - I should add that E85 seems like a natural fit for a southern Wisconsin that is looking at getting a brand new Biodiesel Plant.

2 Comments:

At 11:26 AM, Blogger Fred Juergens said...

One fact that never, well hardly ever, shows up in the E85 discourse is that mileage with E85 is substantially lower than with gasoline. There's just not as much energy in a gallon of E85 as there is in a gallon of gas, and that is never going to change -- it's just the nature of the chemicals.

A month or so ago, the NYTimes had an article elaborating on this point. I'll just cite one example of a vehicle which can run on both fuels:

According to the EPA, 2006 Dodge Ram 1500 pickup burning gasoline gets 12 mpg in city and 15 on highway. Burning E85, the same vehicle gets 9 mpg in city and 11 on highway.

E85 will have to be about 25% cheaper, according to these figures, in order for the cost-per-mile of using E85 to be the same as gasoline.

 
At 6:57 AM, Blogger Walton said...

Good point.

Judging from the Monroe dealer's price of $2/gallon, it appears that the cost is around 30% less thus meeting the reduced mileage criteria.

The next question is how accurate was the $2/gallon? Would it be cheaper with higher demand?

 

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