Auto group says industry being singled out

Automakers be singled out in US legislation aimed at reducing emissions blamed for global warming, said the head of a trade group that represents nine companies including General Motors Corp and Toyota Motor Corp.

"There is need for a comprehensive solution," Dave McCurdy, the former congressman who this month took over as president of the Alliance of Automobile Manufacturers, said in an interview on Friday in Washington.

Congress US President George W. Bush's administration shouldn't "pick on one industry that is already regulated on fuel efficiency," he said.

His remarks come after Bush last month proposed cutting US gasoline consumption by 20 percent in the next 10 years by boosting fuel efficiency and promoting alternatives such as ethanol.

The cost

McCurdy said oil companies and the entire transportation industry must share in the cost of reducing carbon-dioxide emissions linked to global warming.

The Washington-based group's members are GM, Toyota, BMW AG, DaimlerChrysler AG, Ford Motor Co, Mazda Motor Corp, Mitsubishi Motors Corp, Porsche AG and Volkswagen AG.

"The quickest way to reduce greenhouse-gas emissions is to raise fuel-economy standards in the transportation sector," said Kevin Curtis, senior vice president at National Environmental Trust, an advocacy group in Washington.

He added that all industries must share in the costs of lowering those emissions.

Prices ethanol rose to a six-week high last week as refiners and fuel blenders expanded use of the grain-based additive in gasoline.

More ethanol

The US fuel industry is blending more ethanol to replace methyl tertiary butyl ether, or MTBE, a rival additive that was phased out last year.

Ethanol's as a gasoline component has also risen with a rally in oil prices during the past month.

Ethanol is "strong," and prices may rise more, even with the opening of new distilleries boosting production from last year's record levels, said Jeff DeReamer, a Lexington, Kentucky-based consultant.

Refiners use more ethanol in coming weeks as they increase gasoline production for peak summer demand.

Ethanol US$2.2011 a gallon (US$0.58 per liter) as of Friday, up 2.4 percent from US$2.1493 on Feb. 16 and the highest price since Jan. 11, based on data from distributors in Des Moines, Iowa, and other Midwest locations.

US production capacity will more than double during the next few years as new plants open, according to data from the Washington-based Renewable Fuels Association, the US ethanol industry's primary trade group.

There are currently 113 operating US ethanol distilleries with capacity to make 5.58 billion gallons a year, according to the association.

An 78 new plants and seven expansions are under construction that will raise capacity to 11.8 billion gallons.

Meanwhile, Bush said last week that the technology that will let the US produce fuel from farm waste, woodchips and other sources to lessen the country's dependence on foreign oil is "around the corner."

"I know it sounds like a pipe dream to some," Bush said on Feb. 22 at a plant operated by Novozymes A/S unit Novozymes North America Inc in Franklinton, North Carolina.

Biofuels

Novozymes, based in Denmark, is the world's biggest producer of enzymes used in production of biofuels.

"We're on the verge of breakthroughs that will enable a pile of wood chips to become the raw materials for fuels that'll run your car," he said.

The US Department of Agriculture estimates ethanol will use 27 percent of the nation's corn crop in the coming year.

Achieving Bush's goal would require more corn than the US can currently produce, so the president is emphasizing the kind of technology that can produce so-called cellulosic ethanol made from switchgrass, cornstalks and agricultural waste.