GM Statement Regarding E85 Ethanol Cost-Benefit Analysis

Attributable to Alan Adler, manager, Biofuels CommunicationsDETROIT, Nov. 30 /PRNewswire/ -- The cost-benefit analysis of E85 ethanolprepared by the Pardee Rand Graduate School and cited in the Friday, Nov. 30edition of USA Today fails to take into account several positive factors ofthe renewable fuel made from 85 percent ethanol and 15 percent gasoline.

E85 is not yet widely available in the United States - less than 1 percentof fueling stations offer it today - and prices vary widely. Some gasolinestations peg the price of E85 to gasoline, so when gasoline goes up or down inprice, E85 rides with it. Elsewhere, especially in regions where ethanol ismore widely available, the price of E85 is as much as a dollar a gallon less.

"We believe ethanol as a renewable fuel is the best near term alternativeto oil as a transportation fuel and replacing gasoline with ethanol positivelycontributes to lowering greenhouse gas emissions," said GM Chief EconomistMustafa Mohatarem. "You cannot take a snapshot in time and define a maturemarket."

When the Rand study was previewed at GM in October, the authors were toldtheir work did not account for the significantly lower cost of second-generation ethanol that will be made from cellulosic and biomass feed stocks.Most estimates show the cost of making Gen2 ethanol at $1 or less a gallonbefore distribution costs.

(GM did not specifically sponsor the Rand study but does contribute$25,000 a year to Rand annually.)

General Motors is the auto industry leader in offering E85-capablevehicles with more than 2.5 million of the 6 million on the road in the U.S.For 2008, GM offers 11 FlexFuel models able to run on any combination ofethanol and gasoline up to 85 percent ethanol. GM produces about 400,000 E85-capable models a year and will double that to 800,000 a year by 2010. By 2012,GM expects to build more than 2 million FlexFuel vehicles a year.

"By 2012, it will be easier to say which GM vehicles are not E85-capablethan to list which ones are FlexFuel," said Beth Lowery, GM vice president ofEnvironment, Energy and Safety Policy. "And we are just as committed tohelping build the infrastructure for E85."SOURCE General Motors CorporationAlan Adler of General Motors Corporation, +1-313-319-8486, Mobile,Alan.adler@gm.com