Ethanol Dominates Fuel Bill - Huh?

Washington DC November 27, 2007; The AIADA newsletter reported that ethanol mileage credits have become a key sticking point as negotiators from the House and Senate work to craft a 35 mpg energy bill acceptable to both houses of Congress, the White House, and U.S. automakers.

The Detroit News reports House Speaker Nancy Pelosi wants staff negotiators to reach a deal by the end of the day today so there is time for a legal review before House and Senate members return from recess on Monday.

A number of sticking points have emerged, but the major issue is the fuel economy credit automakers get for making flexible-fuel vehicles. The law gives automakers a 1.2-miles-per-gallon credit for building vehicles that can run on gasoline or E-85 ethanol.

The Senate proposal on Monday extended the credit but phased it out quickly and was not enough to satisfy automakers. Since E-85 is available at only 1,200 of the nation's 180,000 fueling stations, most of 6 million-plus flex-fuel vehicles on the road don't use the fuel but automakers still get to claim the credit.