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By Samuel R. Avro on Nov 25, 2008 with no responses

Ethanol Makers Seek Political Advantage In Detroit Bailout


U.S. ethanol makers are asking the Detroit automakers to demonstrate “with certainty and specificity” their commitment to biofuels, seeking to gain political advantage at a time when the car industry is struggling to line up support for an emergency $25 billion loan.

The call came in a letter from a coalition of ethanol trade groups to the chief executives of General Motors Corp. (GM), Ford Motor Co. (F) and Chrysler LLC. The executives flew to Washington on corporate jets last week to plead for the $25 billion, only to return empty-handed after Congress demanded specific details about how they would become profitable and develop a new generation of more environmentally friendly cars.

“To avert dire economic consequences, we implore you to bring resourceful, innovative and practical solutions as you develop the comprehensive plan requested by the U.S. Congress to transform your industry,” the groups wrote Tuesday. “Such a plan should embrace and support implementation of the congressional mandate for use of ethanol.”

Ethanol makers are facing their own struggles in a weak economy and are pinning their hopes on Detroit. While Congress last year voted to increase by five-fold the amount of biofuels that must be used in vehicles, current rules limit ethanol use to a maximum of 10% of ordinary gasoline. The Big Three U.S. automakers together offer dozens of so-called flex-fuel vehicles that can run on gasoline that is 85% ethanol, but a dearth of e85 fueling stations means that the flex-fuel vehicles instead are fueled with ordinary blends.

The result is that ethanol is coming close to reaching the e10 limits that are allowed under Environmental Protection Agency regulations.

Article continues… CNN Money