LANSING – With a new $250,000 biofuel grant program, Michigan’s agricultural industry could see additional revenue in its future.

Currently, there are 19 E85 ethanol stations in the state, according to the Department of Management and Budget. Under the proposed program, there would be 1,000 by 2008.

E85 is a blend of 85 percent ethanol and 15 percent gasoline.

Spirits throughout the industry are high with Gov. Jennifer Granholm’s announcement of the initiative, said Lyn Uphaus, a corn farmer of 500 acres near Manchester. Uphaus is also treasurer of the Great Lakes Ethanol Plant near Blissfield that produces 57 million gallons of ethanol annually.

“This is the most optimistic I’ve seen corn producers in the state for quite a while,” Uphaus said. “Previously, about half of our production left the state, but now we’ll need all of that corn to stay in Michigan and make it a more stable market.”

This optimism is aided by the increased production of E85 cars that can run on as much as 85 percent ethanol, he said.

“Auto manufacturers are starting to make a lot more E85 vehicles, but right now the largest use of ethanol is in E10, which can be used in any car and burns cleaner than regular gasoline,” Uphaus said.

E10 fuel is a blend of 10 percent ethanol and 90 percent gasoline.

Currently, Chrysler, Ford, and General Motors manufacture 21 models that are E85 compatible. Chrysler plans to add eight more models to its 2007 line.

Don Kehrer, an assistant professor of automotive engineering technology at Macomb Community College, said increased production of E85 cars depends on availability of the fuel.

“In the past, there haven’t been enough vehicles that run on biofuel, and now that there are more, it will encourage more fuel production and service stations putting in the pumps they need,” Kehrer said. “With higher fuel costs, people have been pushing renewable energy, but with the gas costs going down, we could see them getting away from this.”

Jan Patrick, the program director at the state Energy Office said the increased availability of biofuel pumps throughout the state would encourage carmakers to produce more E85 cars because consumers will be able to buy fuel for them.

“The missing piece of building and selling more biofuel cars and the diversification of our energy supply is to get the infrastructure out there so that fleets and consumers that want to use this fuel can find it anywhere,” Patrick said.

Michigan has five ethanol plants, with three additional plants in the planning and permitting stages according to the Michigan Ethanol Coalition.

Currently, gas stations selling E85 receive a 50-cent tax break for each gallon of biofuel sold. 

Taxes accounted for 23 percent of the total cost of gas in 2004, according to the U.S. Energy Information Association.

Kehrer said one problem surrounding a shift from gasoline and E10 ethanol is that E85 averages 5 to 10 percent fewer miles per gallon, with prices currently higher than for gasoline.

That could be only a temporary problem if there were more E85 gas stations, he said.

“It takes more ethanol than gasoline to get the same power for a vehicle because the cars are tuned to run on gasoline,” he said. “If there are more E85 gas stations, manufacturers can tune cars so they just use E85, the gas mileage for the cars will improve and people will be more willing to purchase them.”

Patrick said the loss in miles per gallon may not be significant and that some consumers will be willing to bear the higher costs for improved emissions.

“Even though it is a little more expensive, the fuel burns cleaner, relieves foreign dependency and most people have a sense of pride that there are not making the environment worse off,” Patrick said.