Chicago Auto ShowCHICAGO – General Motors Corp. proudly trumpets that more than 1.5 million of its vehicles currently on the road are equipped with flex-fuel engines that can run on E85, a renewable, less-expensive fuel that currently is the rage as auto makers strive to lessen America’s craving for petroleum.

The all-new ’07 Chevrolet Avalanche pickup, unveiled here at the Chicago auto show, is the sixth Chevy vehicle capable of running on ethanol-based E85. Other models include the Impala, Monte Carlo, Suburban, Tahoe and Silverado. (See related story: Avalanche Descends on Chicago)

Ethanol is a biofuel distilled from corn in the U.S. and sugarcane in Brazil. A flex-fuel car can run on gasoline or ethanol or a mix of the two. E85 is a blend of 85% ethyl alcohol (ethanol) and 15% gasoline.

E85-capable ’07 Chevrolet Avalanche debuts in Chicago.

But E85 is hard to find. In 2004, there were only 150 service stations nationwide selling the fuel. The number climbed to 600 in 2005. Michigan has four E85 stations, in Southfield, Dearborn, Greenville and Adrian, according to the National Ethanol Vehicle Coalition.

An additional 2,000 service stations will begin offering E85 in the U.S. this year, says NEVC Executive Director Phillip Lampert. His coalition of corn growers and auto makers is promoting E85 usage.

Estimating how many owners of the 1.5 million GM vehicles actually use E85 is a difficult proposition. Lampert estimates “maybe 1%.”

But E85 advocates remain determined to promote the fuel as an immediate step toward reducing U.S. reliance on foreign oil, a point hammered home last week by President Bush in his State of the Union address.

Lampert says refiners produce about 4 billion gallons (15 billion L) of ethanol annually, a figure that is expected to reach 6 billion (22 billion L) within 18 months.

E85 is produced domestically from agricultural products, primarily corn, and burns cleaner than regular unleaded gasoline, helping to reduce greenhouse gas emissions.

Lampert admits E85 has drawbacks. Although it is 10% to 20% less expensive at the pump than regular unleaded, the fuel contains 27% less energy than gasoline. That translates into a reduction in fuel economy by up to 12% in real-world driving, Lampert says.

Still, the U.S. has some 168,000 gas stations, and Lampert hopes one-quarter of them will be stocking E85 by 2015.

“We’re trying to convince the service station owners that E85 is like the bottled water of 20 years ago,” Lampert says. “People back then wouldn’t have dreamed of stocking bottled water in their refrigerators.”

Also resisting the move toward E85, Lampert says, are “big oil companies,” which have little incentive to promote a fuel that could cut into their profits.

GM at the auto show announces a new partnership with Shell Oil Products U.S. and VeraSun Energy Corp. to promote the use of E85, showcase GM’s E85 FlexFuel product lineup and increase access to E85 in the Chicago area.

Ford Motor Co., which unveiled an Escape Hybrid E85 research vehicle at last month’s Washington auto show, last year announced an alliance with VeraSun Energy Corp., the nation’s second-largest ethanol producer. (See related story: Ford, GM Use D.C. Show to Reveal Hybrid Strategies)

South Dakota-based VeraSun Energy announced at the show here the availability of VE85 brand fuel at 20 Gas City stations in metro Chicago, while Shell, the No.1 gasoline brand in the U.S., will supply E85 refueling pumps at six stations in the area. GM will market the availability of all the stations to its customers and dealers.

In addition, GM will promote E85 next week in the motorsports arena when it hosts the GM FlexFuel 250 race in Daytona, FL.

Not to be outdone, Ford, which has a host of flex-fuel vehicles coming, uses its press conference here to announce the creation of the “Midwest Ethanol Corridor” to promote the use of E85. (See related story: Lincoln Unveils New Navigator, Renamed Zephyr )