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Jim Landers

For car rental firms, it's not easy goin' green

09:04 AM CDT on Tuesday, September 18, 2007

By JIM LANDERS jlanders@dallasnews.com

WASHINGTON ­ America's big car rental companies are painting themselves green to lure customers who want fuel-efficient, clean-burning engines. Without help from Detroit and Houston, however, this paint job won't travel far.

Enterprise, Hertz and Avis are paying above-retail prices to get their hands on a few thousand hybrids. Enterprise already has 41,000 flex-fuel cars that can burn E85, the ethanol biofuel made mostly from corn. More than half the big three's rental fleets now average more than 28 miles per gallon on highways.

Enterprise is among the three major car rental companies that are paying  more than the sticker price for hybrids. Although the rental companies buy 2 million cars each year, they generally take what’s left over from the retail consumer market.
Enterprise
Enterprise is among the three major car rental companies that are paying more than the sticker price for hybrids. Although the rental companies buy 2 million cars each year, they generally take what’s left over from the retail consumer market.

"If we can't come up with an alternative fuel, there's no way we can continue to grow, given the finite nature of petroleum," explains Enterprise vice president Pat Farrell. "And it's getting to the point in states like California and Texas where the air's so bad, they're moving from caps on stationary emitters to the transportation sector. Those have the ability to curtail our business."

Hertz and Avis, with their eyes on toughening requirements in California, are moving hybrids to the Left Coast.

You'd think an industry that buys 2 million cars a year could move the automakers and gas stations toward alternative fuels. But there's no muscle on this bulk buyer. The rental car companies get what's left over after retail consumers buy what they want.

"We tend to be in the position of, while not exactly at the mercy of these guys, but we have to sort of buy what the manufacturers will make available to us at a reasonable cost," said Avis spokesman Kevin Meyer. "The hybrids are costing us a pretty steep premium."

Gas station owners aren't helping much, either. Of 170,000 gas stations across the country, only 1,200 offer E85, said Matt Hartwig, a spokesman for the ethanol lobby known as the Renewable Fuels Association. Kroger has the only E85 pumps in North Texas.

Mr. Farrell said Enterprise runs only about 2,000 of those 41,000 flex-fuel cars on E85, while the rest burn gasoline. (A flex-fuel car can burn any mixture of the two fuels.)

Congress provided a $30,000 tax credit for station owners who added ethanol tanks and pumps or converted gasoline pumps to ethanol, but the oil industry is resisting the fuel. Shell won't allow ethanol to be sold under its canopy.

The oil industry is happy to sell "clean" diesel, which is available at 42 percent of the nation's gas stations. After a strict EPA standard took effect last year, this newly scrubbed fuel is far cleaner and can deliver 25 percent to 30 percent more fuel efficiency than that of gasoline engines. It is widely available in Europe.

If the auto rental companies wanted to push in this direction, they would not get far.

"We do have them [cars that can burn clean diesel] in the U.K.," said Mr. Farrell, "but not here, because they're not available here."

Allen Schaeffer, executive director of the Diesel Technology Forum, said clean-diesel cars should be widely available in three years from both domestic and overseas carmakers.

"They don't build cars for rental companies. They build for what consumers want, and consumers are still on a learning curve as to what these diesel cars are all about," Mr. Schaeffer said.

But Mr. Farrell said Enterprise is still puzzling over how to alert consumers who rent diesels to put the right fuel in them.

The nozzle of a diesel pump is too big to fit the fuel opening of a gasoline-burning car, but a gasoline nozzle will easily fit a diesel – and cause havoc when it reaches the engine.

It's a problem consumers will face and eventually overcome as the auto and fuel industries move more into gasoline alternatives. A filling station of the future might sell three blends of gasoline – plus diesel, E85, compressed natural gas and hydrogen – while some car owners will simply plug their cars into an outlet in the garage.

"If the alternative fuel that ultimately wins is made from soy, corn, switch grass or sugar, it doesn't really matter to us," said Mr. Farrell. "If you can bring it to market in a viable manner, we'll give it a test."

But getting it to the market is going to involve demand from consumers with more clout than the car rental business.

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