GoodFuels

Flex-Fueling the Bail Out

A bail-out for the auto industry could result in more flex-fueled vehicles on the road faster.

Speaker of the House Nancy Pelosi announced Saturday that the plan would require auto makers to embrace more fuel efficient cars and new auto technologies and that existing funds from the $700 billion Troubled Asset Relief Program to be used to help the auto industry - meaning no new money would be authorized by Congress under this plan.

Pelosi said the plan must include the restructuring of the companies “to ensure their long-term economic viability,” new fuel-efficiency standards, and the development of advanced vehicles. She also said it would include “even stronger limits on executive compensation and assurances to protect the taxpayer.”

This is very similar to what Senator Chuck Grassley asked for in a letter sent Friday to Pelosi and Senate Majority Leader Harry Reid. Grassley told them first of all that it was important any legislation contain “restrictions on executive salaries, compensation packages and excessive internal spending.”

“Additionally, auto manufacturers participating in any financial assistance program should be asked to make a renewed commitment to developing and producing automobiles with advanced technologies that significantly improve fuel efficiency as well as to embrace alternative fuels more fully than they have done to date. The domestic auto manufacturers have shown leadership in producing flex-fuel vehicles (FFV) and have informally committed to increase FFV production to 50 percent of all vehicles by 2012. However, taxpayer money must be accompanied by enforceable commitments to FFV production and alternative fuel use. Any auto company which accepts federal financial assistance should agree to an enforceable commitment to produce 100 percent FFV’s in the shortest possible time frame.”

“Auto manufacturers have so far been reluctant to embrace the use of mid-level or intermediate blends of alternative fuels. To reduce our dependence on foreign oil and ensure the greatest possible use of alternative fuels as quickly as possible, auto manufacturers must also commit to support and advocate intermediate blends of alternative fuel.”

If those conditions are actually spelled out in the bail-out legislation and carried out by the auto industry, this could wind up being a real benefit for not only the ethanol industry, but consumers as well by giving them a real choice at the pump.