LOS ANGELES --- General Motors is working with the state of California, Chevron Technology Ventures, and Pacific Ethanol on a project aimed at learning more about potential consumer demand for E-85 as a motor vehicle fuel. The fuel will be used in GM's flexible-fuel vehicles. GM announced the project at the L.A. Auto Show. The automaker intends to offer between 50 to 100 of its E-85-capable Chevrolet Impala passenger cars and Silverado pickup trucks for consideration in the state's annual competitive bid process. Flexible-fuel vehicles will be used by the California Department of Transportation (CalTrans) at various operations in Northern California and the state's Central Valley. Chevron Technology Ventures intends to work with CalTrans to provide E-85 fuel and install the necessary refueling pumps in these locations. Pacific Ethanol, a California-based ethanol production and marketing company, intends to provide the ethanol to Chevron Technology Ventures for the project. Since California imports more than half of its crude oil, developing diverse energy sources has become a statewide priority. The ethanol project is designed to explore the merits of E-85 to help meet that goal, and its potential to comply with California's stringent emissions standards. Although somewhat lower in energy content, ethanol delivers similar performance as regular gasoline and is a renewable, domestically produced fuel. E-85, a blend of 85 percent ethyl alcohol and 15 percent gasoline, is produced from the starch and sugar in agricultural products, primarily domestically-produced corn. "Chevron is exploring a variety of energy sources, including ethanol," said Greg Vesey, president of Chevron Technology Ventures. "We expect this effort will help us learn more about consumer acceptance of E-85 as well as issues surrounding its production and distribution." For GM, this collaboration with California is an important first step in helping to create and grow an E-85 refueling infrastructure for its E-85-capable vehicles on the road and in showrooms, said Elizabeth A. Lowery, GM's vice president of environment and energy. Pacific Ethanol is constructing a large-scale ethanol facility in Madera, Calif., and has plans to build four ethanol plants in the state during the next two years, said Bill Jones, Pacific Ethanol's Chairman. "Each plant will create more than 700 new jobs in California, and infuse more than $100 million in capital into the local economy," Jones said. "E-85 can help increase the amount of renewable fuel already used in California." GM has made a major commitment to E-85 flexible-fuel vehicles in the United States, with 1.5 million of these vehicles on the road today. GM approved the use of 10 percent ethanol blended gasoline in all GM products more than 20 years ago, and produces almost five million E-10 capable vehicles annually. For the 2006-model year, GM offers nine E85 flexible-fuel vehicles: the Chevrolet Tahoe, GMC Yukon, Chevrolet Suburban, GMC Yukon XL, Chevrolet Silverado, GMC Sierra, Chevrolet Avalanche, Chevrolet Impala, and the Chevrolet Monte Carlo. GM's E-85 vehicles can operate on either gasoline or 85 percent ethanol without any additional modifications, aftermarket conversions, or cumbersome switches for vehicle users. Currently, there are more than 400 public E-85 fueling sites in operation across the nation. In addition to producing E85 flexible fuel vehicles, GM has also partnered with the Governors' Ethanol Coalition (GEC), a bipartisan group of governors promoting greater use of ethanol.

Originally posted on Fleet Financials