Archives for January 2013

Fuel Efficient Vehicles and Federal Tax Incentives

January 31, 2013 by admin 2 Comments

If you are confused by the various federal tax incentives available on fuel efficient vehicles, you are not alone. There is a wide difference between current and past federal tax credits and with the way that these incentives are handled. For instance, a tax deduction reduces the amount of income that you are taxed while a tax credit reduces the amount of tax that you owe. Six of one and a half dozen of another? Not hardly.

Active Tax Credits

ZEV and tax incentives — Tax incentives have been offered on a variety of vehicles including diesels, hybrids (HEVs), plug-in hybrids (PHEV), electric vehicles (EV) and alternative fuel vehicles (AFV). There are no federal tax incentives for vehicles that take E85 fuel. Read on for a review of the tax incentives offered including both expired and still active tax credits.

ZEV Diesels — The German manufacturers had a lock on this segment with Audi, BMW, Mercedes-Benz and Volkswagen each producing multiple models that qualified for a federal tax credit for up to $3,400 per vehicle. Applicable models were built from 2008 with cars purchased through 2010 eligible for the credit. If you missed claiming the credit you may still have a chance to get money back by amending your tax return and filing IRS Form 8910.

Hybrids — Like diesels, hybrid models once qualified for a federal tax credit for up to $3,400. At one point vehicles from BMW, Chrysler, Ford, GM, Honda, Mazda, Mercedes, Nissan, Porsche and Toyota were eligible. Given that the program limited the incentive to the first 60,000 HEVs sold by a manufacturer, Toyota took an early exit as cars bought after Sept. 30, 2007, were not eligible. Honda hybrids sold after 2008 were not included while Ford hit its limit on March 31, 2010. Like the diesels, you may be able to amend your tax return to claim a credit that expired for all vehicles at the end of 2010.

Plug-In Hybrids — One of the newest kids on the block are PHEVs. The Chevrolet Volt got this segment going in Dec. 2010, landing its owners a $7,500 tax credit. The Fisker Karma also qualifies for the full tax credit while cars from Ford, Toyota and Honda enjoy federal tax incentives ranging from $2,500 to $3,751. These amounts vary as the tax formula is based on how long each model operates on electric-only power. To qualify for the credit, taxpayers must fill out Form 8936 Qualified Plug-in Electric Drive Motor Vehicle Credit and submit that with their tax return.

Electric Vehicles — Like PHEVs, EVs come with a federal tax credit for up to $7,500. The current program kicked in back in 2010, replacing an earlier program that began with the Tesla Roadster. There are a number of EVs that qualify for the federal tax credit including models from CODA Automotive, Ford, Toyota, Nissan, Think, Mitsubishi, Smart, Wheego and Tesla Motors. Models from AMP Electric Vehicles, Electric Mobile Cars and Azure Dynamics are also eligible. Check out IRS directive IRC 30D for more information.

Alternative Fuel Vehicles — Vehicles that run on a completely different form of fuel such as hydrogen, liquified petroleum gas (LPG), liquified natural gas (LNG) or compressed natural gas (CNG) were eligible for a federal tax credit of up to $4,000. That credit was in place for six years beginning on Jan. 1, 2006, and was applied to just one model: the Honda Civic GX, a CNG-fueled vehicle. Like diesel and hybrid owners that missed the credit, you can try amending your tax return.

Tax Incentives and Notes

So, why the confusion regarding tax breaks for fuel efficient vehicles? Credit the changing laws on the federal level as well as state incentives that may also come into play. If you are still not sure what tax incentives are in place where you live, your state department of motor vehicle can clue you in.

See Also — Lexus: 1 Million Hybrid Vehicles Later

Policy Makers, Industry Leaders Weigh In at National Journal Summit

January 30, 2013 by admin 1 Comment

Hundreds were on hand at the Affordable Mobility policy
summit that kicked off this year’s Washington Auto Show.

The National Journal and the Washington Area New Auto Dealers Association co-hosted a policy summit today to kick off the 2013 Washington Auto Show, bringing together policy makers and automotive industry officials to discuss several matters. Titled, Affordable Mobility: A Roadmap to Energy Efficiency, the two-hour summit was split evenly between an expert panel discussion and a report from the automakers.

Panel Discussion

National Journals Fawn Johnson moderated the panel discussion. Participants were: Mitch Bainwol, president and chief executive officer of the Alliance of Automobile Manufacturers; Don Chalmers of the National Auto Dealers Association; Gina McCarthy, Assistant Administrator, EPA Office of Air and Radiation; Mary Nichols, Chairman, of the California Air Resources Board; and Rebecca Lindland, Director, Automotive Research, IHS Automotive.

WANADAs Gerard N. Murphy introduced Johnson who queried the panel. Chalmers noted the importance of the auto industry to the national, indeed the global economy, citing that 15 percent of US retail sales is made up of car sales volume. The industry, including manufacturers, suppliers and dealers, also employs tens of millions of Americans.

Government Mandates

Chalmers expressed concern about both the pace of the new 54.5 mpg fleet mandates required by 2025 and consumer willingness to accept the changes. He noted that the US is a very, very diverse country with very, very diverse consumers. What the city dweller might be interested in driving is far different from what the consumer in Oklahoma, New Mexico and elsewhere might want.

He also raised an issue that has heretofore received scant attention: the impact of consumer financing. With 90 percent of new vehicles leased or purchased, loan underwriters such as banks are not concerned about fuel mileage and emissions standards, rather about loan-to-value ratios, a point that Lindland reiterated.

Regulatory Accomplishments

Both McCarthy and Nichols stressed the accomplishments of their respective government agencies EPA and CARB with successfully helping manufacturers build more fuel efficient vehicles while also reducing greenhouse gases. The EPA is in the process of adopting Tier 3 rules for the control of air pollution from motor vehicles, a sulfur reduction initiative pioneered by the Golden State.

Throughout the panel discussion and again with the industry report, mid term review came up numerous times. Groups such as Auto Alliance have called for one or more reviews especially as the rules extend out by 13 years. Reg Medlin, Director Regulatory Affairs for Chrysler, called for a robust midterm review, one that would evaluate where the market has come from and to adjust accordingly for the intervening years.

Unintended Consequences

Lindland noted that policy makers and industry leaders should be alert to certain unintended consequences that could adversely impact the changes that are rolling out. She noted that affordability is the biggest issue for many consumers, while also citing that personal wealth is an important factor for the adoption of EVs and other advanced powertrains. Indeed, the average income of Chevrolet Volt and Nissan LEAF buyers is about $150,000, compared to $68,000 for all car buyers. Lindland asserted that the greening of the US consumer fleet could be stymied if the cost of vehicle ownership rises.

Bainwol, on behalf of the AAM, took a more middle of the road approach. He noted that automotive manufacturers want certainty over time especially as they seek to invest billions of dollars in new technologies. Still, there is much risk involved as consumers adapt to new vehicles with no one really knows how they will respond. Bainwol reiterated calls for a mid-term review to gauge what consumers are buying.

Industry Panel

The second part of the policy summit included Reg Modlin who was joined by Robert Bienenfeld, Senior Manger, Environment Energy Strategy, Product Regulatory Office, American Honda Motor Co., Inc. and Tom Stricker, Vice President of Technical and Regulatory Affairs, and Energy and Environmental Research for Toyota. National Journals Amy Harder moderated.

The industry leaders stressed that the 2025 fuel economy standards are ambitious for reducing greenhouse gases and in improving fuel economy. The three gentlemen agreed that there needs to be clear rules, that the rules must be technologically neutral and competitive. Once again, what consumers will do for the short-, mid- and long-term remains the unknowable part of the equation, something that lawmakers and industry leaders will need to keep in mind as they move forward.

Daimler, Nissan and Ford Tie One On

January 30, 2013 by admin 1 Comment

Fuel cell partnership to yield vehicles from each company.

Mercedes-Benz F-Cell — The Mercedes-Benz B-Class F-Cell FCEV.

The move to deeper and more significant collaboration between global automakers took yet another turn this week when Daimler AG, Nissan Motor Co., Ltd., and the Ford Motor Company signed a three-way agreement to jointly develop a common fuel cell system. The historic accord, announced on Monday, is expected to yield the first mass-produced fuel cell electric vehicles from each manufacturer as early as 2017.

In a joint press statement, the three companies stated that the collaboration will significantly reduce investment costs as well as help define global specifications and component standards. The companies also had suppliers and policy makers in mind with an eye toward encouraging the development of a global hydrogen infrastructure.

Fuel Cell Experience

The partner companies each bring FCEV experience to the table. Daimler has been working on the technology since 1994 and has made 180 patent applications to date. A small number of Mercedes-Benz B-Class F-CELL MPVs have been on the market since 2009.

In October 2011, Nissan introduced its next generation fuel cell stack, enabling it to increase power density by 2.5 times over the 2005 mode. That stack also reduced the amount of platinum used by 75 percent and the stacks cost by 85 percent.

The Ford Motor Company developed its first research prototype FCEV in 1999 and rolled out a demonstration fleet of vehicles in 2005 based on the Ford Focus. From 2005 to 2009, Ford participated in a technology demonstration program in the United States as well as in similar programs in Canada and in Europe, with 30 Ford Focus FCEVs used.

How It Works

Toyota Hydrogen Fueling Station — With Toyota backing, a hydrogen fueling station is in operation in Torrance, Calif.

FCEVs are powered by an electric motor, much as electric vehicles such as the Nissan LEAF, CODA Sedan and Tesla S are also powered by electricity. Highly compressed and pressurized hydrogen is kept in a storage tank with a fuel cell stack used to convert hydrogen gas and oxygen into electricity. A power control unit governs the flow of electricity to the electric motor. A high-output battery stores energy made from regenerative braking and also provides additional power to the electric motor.

Lacking at the moment is a comprehensive and national hydrogen fueling station network. As of publication there are only 10 public stations available, nine are on the west coast. Water vapor and heat are the lone byproducts of FCEVs.

Further Collaboration Possible

The three companies will share in the engineering work for both the fuel cell stack and the fuel cell system at several yet to be identified locations around the world. Additional collaboration on other FCEV components may also flow from the agreement.

As for working in concert with rival companies, Raj Nair, Fords group vice president, Global Product Development, may have summed it up best when he said, We will all benefit from this relationship as the resulting solution will be better than any one company working alone.” Look for that sort of reasoning to be applied to every strategic business relationship currently being weighed elsewhere across the auto industry.

Off to the Washington Auto Show

January 29, 2013 by admin Leave a Comment

So, what do you think about the Washington Auto Show, I inquired. Is it something that I should plan to attend? With a wry smile the esteemed auto journo replied, It isn’t as exciting as Detroit what with all the policy talk, so if it came down to choosing just one I would go to Detroit. After all, every top manufacturer will be there and they throw some really great parties!

Leaving on an Amtrak Train

I carefully took in his response, offered my thanks and then left. Over the ensuing weeks I must have decided that I would ignore his advice and party possibilities as I found myself contacting the Washington Auto Show to secure my media credentials. After all, I had been to the Detroit auto show as well as to shows in Los Angeles and New York. Why not take in a lively debate about affordable mobility and get some close up looks at the hairpieces of not a few of our elected officials?

The Washington Auto Show is different, but still important and it is for those reasons why Im boarding an Amtrak train and heading out. How ironic is that? This auto journo will rely exclusively on mass transportation to get around. Well, you can call it irony or just consider it plain good sense: Washington, DC is best visited on foot with mass transit making connections between various points of interest possible.

Public Policy, Industry and Media

Instead of official media days, the Washington Auto Show holds a Public Policy Day on Capitol Hill on Wednesday followed by an Industry/Media Day at the Walter E. Washington Convention Center on Thurs. That second day begins with a WAPA- and IMPA-sponsored breakfast followed by a keynote address from Audi of America president, Scott Keogh. Later that morning will be a congressional summary of the top policy priorities followed by the first-ever Green Car Technology Award announcement by Green Car Journal.

The remainder of the policy day will include announcements from Ford, Jeep, GM and Nissan with US Secretary of Energy, Steven Chu, presenting the government keynote address in the afternoon. A plenary session, a joint EPA-NADA partnership announcement and an auto show preview follow.

Public Show Days

If you are in the area, the public portion of the show will be held from Feb. 1 to Feb. 10, 2013. New this year is a Luxury Showcase that brings 11 luxury brands together on the first floor and an Exotic Car area. Ive been told that the Advanced Technology SuperHighway Café is not to be missed, as it features current innovations in safety, sustainability and technology.

All told, more than 700 new vehicles from 42 manufacturers will be present. Sure, the DC auto show may not have the allure of a Detroit or Los Angeles automotive event, but you aren’t likely to feel shortchanged either with cars, stars, contests and even car giveaways among the many attractions of this annual very capital event.

California Tax Breaks for Fuel Efficient Vehicles

January 28, 2013 by admin 2 Comments

The state of California continues to demonstrate leadership in advancing a sustainable energy policy with its Clean Vehicle Rebate Project the cornerstone from which it advances this initiative. Funded by the California Environmental Protection Agency’s Air Resource Board, this California Center for Sustainable Energy managed program provides state rebates of up to $2,500 per eligible vehicle. Purchased and leased vehicles are covered under its program.

Clean Vehicle Rebate Project

The Clean Vehicle Rebate Project was designed with the sole purpose to encourage and accelerate zero-emission, on-road vehicle deployment and technology innovation.

Eligible vehicles must have been bought new to qualify for a California tax break. Three categories of electric vehicles are covered: battery electric vehicles (BEV), plug-in hybrid electric vehicles (PHEV) and fuel cell vehicles (FCEV). Standard hybrids such as the Toyota Prius c and the Lincoln MKZ Hybrid are not part of the project.

Purchase, Lease Requirements

The project applies only to vehicles that were purchased or leased from March 15, 2010. Such vehicles must be ARB certified and are restricted to a gross vehicle weight of up to 8,500 pounds. While this requirement excludes converted heavy duty pickup trucks, the project encompasses cars, zero emission motorcycles and neighborhood electric vehicles.

To qualify, individuals and businesses as well as government entities and nonprofit organizations must be based in California. Those businesses or groups with a California based affiliate are also eligible provided that the vehicle is registered in the Golden State. Applicants must own or lease a vehicle for a minimum of 36 months. If a California DMV-registered vehicle is sold or returned ahead of time, ARB approval must be given first and the tax credit prorated and returned to the state. No vehicle, however, can be sold for a profit during that 36-month period.

Eligible California Vehicles

California identifies a large number of vehicles that are eligible under CVRP. For instance, the Honda FCX Clarity, an FCEV, can garner lessees a $2,500 tax rebate as can the Mercedes-Benz F-Cell. Your battery electric vehicle options are more numerous and include the CODA Sedan, Honda Fit EV, Mitsubishi i-MiEV, Smart Fortwo EV, the Tesla Roadster, Toyota RAV4 EV and vehicles from Ford, Think, Wheego, Nissan and BYD. The state tax rebates here are for up to $2,500.

A handful of PHEV models are also eligible including the Chevrolet Volt, Honda Accord, Ford Fusion Energi, Ford CMAX Energi and the Toyota Prius PHEV. California tax rebates in this category are $1,500. Lastly, qualified ZEV motorcycles and neighborhood electric vehicles may also be eligible for a $900 California tax rebate.

GM, PSA Peugeot Citroën Hash Out Strategic Alliance

January 27, 2013 by admin 1 Comment

Last year, the General Motors Company and PSA Peugeot Citroën announced a global strategic alliance, but the details of that agreement were not fully made known. That is because the two car manufacturers were still examining how best to move forward in a declining European market where most of the planned collaboration would be put in place.

Brussels Meeting

At a meeting in Brussels last week, Steve Girsky, GM Vice Chairman and Philippe Varin, Chairman of the PSA Peugeot Citroën Managing Board, provided further details about the alliance. The announcement follows work completed this past December to hash out common vehicle projects, logistics and purchasing agreements that are the foundation of this alliance.

Each partner will be responsible for developing certain vehicle platforms that will be used to power future Opel/Vauxhall and Peugeot Citroën models.

Model Platforms

Peugeot Citroën will be responsible for providing the platform to underpin a future C-segment (compact) multipurpose Opel/Vauxhall vehicle and a crossover utility vehicle for the Peugeot brand. PSA will also supply the B-segment (subcompact) platform for MPVs designed for both car manufacturers. The development of such a vehicle will be handled by GM, however.

Both manufacturers will co-develop subcompact cars that will comprise a new generation of Opel/Vauxhall and Peugeot Citroën vehicles. In this instance, the cars will be built for Europe, but also sold in markets beyond the continent. The companies plan to explore ways to achieve greater collaboration in emerging markets such as in Latin America and in Russia.

Engine Collaborations

GM and PSA will also jointly develop a new generation of tiny engines, three cylinder gasoline engines that will be derived from PSA Peugeot Citroën’s EB current line.

Not mentioned is the possible wider distribution of PSAs new hybrid air technology, announced last week and shared by Auto Trends. It is quite possible that PSA will want to share the costs of this project with perhaps licensing the same for future Chevrolet, Opel, Vauxhall and Holden models.

PSA Peugeot Citroen

See Also — Peugeot Prepares for its U.S. Return

Joint Purchasing

Another area where the two partners will benefit from is with purchasing in Europe. The two companies have set up a joint purchasing organization that is set to begin soon. A GM executive will lead this operation initially followed by a pair of executives from each company later on. The positions of Vice President Purchasing and Deputy Vice President Purchasing will be rotated between the companies.

For GM and PSA, the alliance is something both companies want and need to succeed. GMs European operations have been costing the company dearly while PSA struggles to remain competitive in a market that has been in decline. By working together, the two companies hope that they can enjoy some mutual relief and begin to put their financial problems in their respective rear view mirrors.

What You Need to Know About Winter Driving

January 26, 2013 by admin 2 Comments

Just as parts of the Northern Hemisphere enters a deep freeze, our friends in the Southern Hemisphere are enduring record heat. The earth may be a little blue marble, but weather conditions can vary widely and have a huge impact on your car.

Driving Tips

If you are planning to take an extended trip this season, the following winter driving tips are worth reviewing.

1. Examine your antifreeze. When was the last time you checked your antifreeze? It may not need to be flushed, but it may need to be topped off. Check for leaks too you do not want to get stranded because your radiator was not up to the task.

2. Check your tires. It is always good practice to outfit your car with snow tires when driving on icy, slippery roads. You may have been lulled into believing that all-season tires are sufficient to get the job done, but you simply cannot get the same benefit from tread design and compounds used with snow tires. And, yes, for maximum traction place snow tires on all four corners, not just two.

3. Look at your brake system. An anti-lock brake system can help your car stop, but it is no substitute for worn brake pads and caliper problems. While you are underneath your car, check that the exhaust system is functioning properly too.

4. Top off the windshield washer reservoir. Head out on the road when the snow is melting and you will hit a barrage of slush that will splash up onto your windshield. You will need to start your trip with a full windshield washer reservoir with an antifreeze agent. Replace your wiper blades too if they have not been swapped out in at least six months. Bring an extra container of fluid with you.

5. Bring along emergency supplies. The possibility that you might get stranded looms as you hit the road under unfavorable weather conditions. Ideally, you will wait out a storm, but if you must travel, bring the following items with you: a snow shovel, brush, jumper cables, kitty litter or sand for traction, a spare cell phone battery, flares, blankets, water, food, a mirror to signal for help, and ample clothing. Let someone know of your intended route, giving them instructions to call for help if you do not arrive at your destination at the prescribed time.

6. Practice safe winter driving. You are quite the maverick on the road, are you not? With winter driving, you will quickly discover that you do not always have as much control over your vehicle as you would when road conditions are dry. And neither do other drivers. Ease up on the gas pedal, gently apply the brakes and allow for more room between yourself and other cars. When roads are slick or slippery, you need to account for longer stopping distances.

Winter Driving

If you have a GPS navigation system, keep tabs on possible delays and detours. If your route must change, call ahead to tell your party that your trip has been altered accordingly. If you have an emergency give 9-1-1 a call. Also, make sure that your auto club membership is up to date you may need to call for a tow truck if you get stuck.

See Also — 7 Winter Storage Tips for Classic Cars

“winter driving.” by clive-staples is licensed under CC BY 2.0

Toyota, Ford Pace 2012 Manufacturer Recalls

January 25, 2013 by admin Leave a Comment

Toyota Motor Engineering & Manufacturing and the Ford Motor Company both had the dubious distinction of leading all car manufacturers in the number of recalls in 2012. Toyotas 12 recalls affected 5,330,643 vehicles or nearly 2 million more than second-place Honda. Ford led in the number of recall cycles, 24, affecting 1,398,837 vehicles. As usual, the big volume manufacturers led the list, but Subaru managed to place sixth with 962,123 vehicles affected from its four recalls.

Calendar Year Recalls

In all, the NHTSA reported more than 650 product recalls in 2012 covering 17.8 million vehicles. The NHTSA total included specific make/model vehicles as well as safety equipment and child car seats. Its numbers were based on the calendar year, not the model year.

The NHTSA gathers its product information through direct reports from consumers, but has also taken advantage of the digital age to gather data. Personnel from its Office of Defects Investigation listen in to online conversations, culling information from fan sites, individual automotive sites and bulletin boards. It also reviews technical service bulletins, trade publications and leading magazines to gauge what consumers are talking about.

NHTSA Recall Influence

Altogether, the NHTSA claims that it influenced recalls for more than 9 million vehicles and over 60,000 items such as tires and child safety seats in 2012. Said U.S. Transportation Secretary Ray LaHood. We have one of the most effective programs in the world and will continue, in 2013, to pursue investigations and recalls wherever our data justifies doing so. LaHood lauded his staff for its role in uncovering and initiating more than half of affected recalls in 2012.

The NHTSA boasts of its data accumulation prowess, noting that over the past three years it has handled nearly 42,000 complaints for possible safety defects, down over each of the two succeeding years. Still those recalls involved more than 22 million automotive products and vehicles, enabling this federal agency to stay ahead of the recall curve.

The Statistics Game

And if mind-blowing statistics is your thing, the NHTSA says that it has handled more than 17,000 recalls since it got started in 1966, accounting for more than 500 million affected vehicles and over 84 million items of equipment.

Lastly, the NHTSA notes that the huge number of recalls for some manufacturers isnt necessarily a reflection on vehicle quality. Rather, the introduction of new technologies tends to increase the number of recalls, as manufacturers work through the kinks to provide state-of-the-art vehicles and equipment for today’s discriminating new car buyers.

About the 2014 Honda Accord Plug-In Hybrid

January 24, 2013 by admin 1 Comment

Subtle styling differences define the Honda Accord PHEV.

The Honda Accord Hybrid is back and this time it comes in both plug-in and standard hybrid configurations. The standard hybrid will be produced in the United States and go on sale this fall, while the PHEV hybrid is already available, a 2014 model that went on sale at select New York and California dealers on Jan. 15. This midsize, front-wheel-drive sedan offers segment-leading fuel efficiency, besting the Ford Fusion Energi, the Chevrolet Volt and Toyota Prius PHEV models.

Electric-Only Power

The newest Accord model retails for $39,870 and can travel 13 miles on electric-only power. Its EPA combined MPGe rating is 115 MPGe, while its fuel economy rating is 47 mpg around the city and 46 miles on the highway. A federal tax credit may also available apply.

The new model uses Honda Earth Dreams technology, a two motor system that works with a 2.0-liter four cylinder gas engine to power the sedan. A 124-kilowatt electric motor does double duty as a continuously variable automatic transmission and is assisted by a lithium-ion battery pack. Regenerative braking also contributes to the electrification process.

Drivers can move between an all-electric EV drive, a gasoline-electric hybrid drive and a direct energy drive with two additional modes available to serve their commuting needs.

Default EV Mode

The default start mode for the Accord PHEV is all-electric, switching automatically to gas/electric hybrid mode when the battery state of charge reaches a bottom threshold level. A center console button enables drivers to choose EV-only mode, ideal for jaunts around the neighborhood or an HV mode that allows for regular hybrid operation. With the latter, the battery’s charge level remains constant.

Honda says that the PHEV Accords battery can be full charged in less than three hours using a conventional 120-volt household outlet via the sedans equipped cord. Charging time comes in at less than one hour when a 240-volt Level-2 charger is used. A smartphone app enables owners to monitor the charging state remotely as well.

Accord PHEV shoppers will find a car that matches the Accord Touring trim level while offering its own styling cues, especially evident across the grille. The new model is available in three shades including burnished silver metallic, the latter unique to the PHEV.

Ohio Manufacturing Plant

With limited distribution and a small number of models to offer at first, the Honda Accord PHEV will serve as a halo product for its EV fleet. The real test for Honda comes when the Honda Accord Hybrid is released, a model that will be built at its Marysville, Ohio plant, joining the Insight and Civic Hybrid when it goes on sale this fall.

See Also — 2017 Honda Accord Hybrid Makes 48 MPG

Photo courtesy of American Honda Motor Co. Inc.

Sweetwater Energy, Front Range Energy Ink $100MM Deal

January 23, 2013 by admin Leave a Comment

Second blockbuster deal of the month for NY-based Sweetwater Energy.

Americas dependency on foreign sources of oil will be broken once other forms of energy as well as a net reduction in energy usage is achieved. Coal, nuclear power plants, natural gas, our own oil reserves and ethanol will likely help lower that dependency, with revolutionary powertrains also playing a part. It is a process that will take many years to achieve, with technological and engineering advancements playing no small part.

Ethanol Production

sugar can leaves — Sugar cane residue can be used as a biofuel
(Photo credit: Wikipedia)

So far, ethanols impact on Americas energy use is still quite small. Most ethanol is derived from corn-based materials and is, therefore, not widely available nationwide. Ethanols price and its lower energy efficiency also mean that it is not yet a viable alternative to gasoline. What may change that is the expanded development of cellulosic ethanol, biofuel that is made up of such materials as discarded tires, wood chips, plant products and grasses.

Sweetwater Energy, Inc., a producer of cellulosic sugar, recently signed a deal with Front Range Energy to generate cellulosic biofuel at Front Ranges facility in Windsor, Colorado. The Rochester, NY-based company says that the agreement is worth more than $100 million and will last for 15 years. Sweetwater will convert Front Range-supplied cellulosic materials into highly fermentable sugar for Front Range to ferment into ethanol.

Energy Deals

The Sweewater-Front Range deal is one of the larger ones in recent years and comes as other companies are doing the same. Indeed, just two weeks earlier Sweetwater inked a separate $100 million deal with Ace Ethanol, a Stanley, Wisc.-based corn ethanol producer.

Front Ranges capital outlay will be relatively small, with the move helping to stabilize its feedstock costs according to a Sweetwater Energy press memorandum. As part of the deal, Sweetwater will place one of its cellulosic facilities near the Front Range site. Sweetwater says that it will be able to deliver up to 3.6 million gallons of ethanol annually in the early stages of the agreement.

Patented Production

On Dec. 4, 2012, Sweetwater Energy, Inc. received a United States Patent (No. 8,323,923) for its method and system for producing ethanol.

That patent outlines a unique production and processing method for ethanol that …takes place outside of a centralized ethanol producing plant at a distributed feedstock processing plant, and separation of the resulting liquid and solid occurs prior to fermentation using this distributed production method. Sweetwater employs a hub-and-spoke distribution method, one that reduces operating and transportation costs, improves ethanol production and achieves economies of scale.

Unique Technology

Sweetwater Energy uses unique technology to produce low-cost sugars from a variety of non-plant materials including wood thinning, crop residues and energy sorghum. Energy sorghum is especially appealing for farmers as it can be planted late while opening up the possibility of double cropping with winter wheat, a potential boon for farmers.