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A U.S. government program designed to encourage automakers to make vehicles that increase the use of alternative fuels such as ethanol may have increased demand for gasoline and worsened environmental damage, according to a draft study by U.S. government agencies for Congress.
The draft report produced last year, a copy of which was provided to Reuters, analyzed the program which gives automakers special fuel economy credits for manufacturing vehicles which can operate with a mixture of gasoline and alternatives fuel such as ethanol made from corn and other renewable crops.
It concludes that automakers have expanded production of alternative fuel vehicles but that few of those vehicles actually use ethanol because of a lack of service stations supplying it.
There were only 101 stations nationwide that provided fuel mixtures of gasoline and ethanol. And of the 176,000 gas stations nationwide only 2.9 percent of them were alternative fuel stations, the report said.
As a result, the program may actually have led to higher use of gasoline and greater greenhouse gases emissions. Greenhouse gases are suspected of causing global warming. "It can be concluded that the ... incentive provision has actually increased petroleum consumption and greenhouse gasses. Further, given the slow rate of growth of alternative fuel infrastructure, it does not appear likely that any energy conservation and environmental benefits will be realized through the period that is being considered for extension of this provision (2008)," the report said.
The report was compiled by the U.S. Transportation and Energy Departments and the Environmental Protection Agency. It could be used by Congress as it decides how to respond to the rising price of energy and whether to extend the alternative fuel program.