The IndyCar Series, which began blending its methanol fuel with 10 percent ethanol this year, is on track to switch to 100 percent ethanol next year, the Ethanol Promotion and Information Council said Thursday.

The cars are used for the Indianapolis 500 and other top-level Indy Racing League events. The announcement was made at the International Fuel Ethanol Workshop & Expo in Milwaukee, Wisconsin.

“The switch this year to 10 percent ethanol was the first fuel change since 1964,” said Reece Nanfito, senior director of marketing for EPIC, the ethanol council. “The switch had no impact on performance; if anything, it improved performance this year. Next year, all the cars in the IndyCar Series will run entirely on that fuel.”

Jamie Schwartzkopf, head of the racing program for ethanol company Renova Energy, said the Indy news will have a big effect on ethanol awareness.

“That’s huge,” he said. “It’s such a large platform. It’s the pinnacle of the sport. It’s basically like yelling about ethanol from the highest stage.”

Mr. Schwartzkopf is part of the five-car Renova Energy Racing team, which races ethanol cars in the West Central division of the National Hot Rod Association.

“Interaction is a pit pass,” he said. “People come to the pit and see that we’re using ethanol and see that they can use it in their cars. Everything we do translates to the consumer. We’re there to help educate the consumer, to try to show them that ethanol does perform, and to make them more comfortable driving a regular car with ethanol in it.”

Ethanol Awareness

Racing teams and other marketing efforts have been effective at raising awareness about ethanol, said Dave Vander Griend, CEO of ethanol company ICM.

Still, while the industry may have taken strides in marketing, other challenges remain. According to a Frost & Sullivan report by Sreekanth Vankataraman, industry manager of the energy and power systems group, those challenges include transportation of feedstocks, difficulty finding the right markets, construction costs, lengthy delivery times, and a shortage of skilled labor that is increasing costs.

According to a study EPIC released Thursday, 73 percent of American consumers say they are likely to purchase ethanol-blended fuel—a 9 percent increase since January 2005. Also, nearly 90 percent of those who are familiar with ethanol associate the fuel with positive benefits, particularly with environmental benefits such as a reduction of tailpipe emissions.

But the study, conducted in May by independent research firm Luth Research, found that most consumers don’t realize that ethanol is often available near them.

According to the online survey of 1,034 drivers, only 15 percent of the participants thought that ethanol was available where they fill up, while 45 percent thought that ethanol was not available, and 40 percent didn’t know. Once the participants checked at their stations, 85 percent found that ethanol was available, 10 percent found it wasn’t available, and 7 percent couldn’t tell whether or not it was available.

The study also found that consumers are confused about the difference between terms like E10 and E85. E10 is a blend of 10 percent ethanol and 90 percent gasoline, which all cars in the United States can use, and E85 is a blend of 85 percent ethanol and 15 percent gasoline, which only so-called flex-fuel cars can use. The U.S. has 6 million flex-fuel vehicles today.

One problem is a lack of consistent labeling at the pumps, said Mr. Nanfito. “Often times even when ethanol is available at the pump, it’s not called out with labels, so even if a consumer is aware of ethanol, they might not realize it’s there for them to choose,” he said.

Wider availability is also needed, and price might also be an issue, Mr. Nanfito said. “Price is certainly something consumers are focused on right now, so I can’t dispute the price has an impact, but at 10 percent, it’s not a big impact,” he said.

The price varies, but can run about a penny per percentage point per gallon more, meaning a 10 percent blend could cost $0.10 more per gallon. Of course, the price will come down as ethanol becomes more available, Mr. Nanfito said.

Regional Differences

In some places, such as on the race track and in parts of the Midwest, ethanol is already cheaper than gasoline, Mr. Schwartzkopf said. Racing gasoline is $6 to $8 per gallon, and ethanol is $2 to $3 per gallon, he said.

While anyone can use a 10 percent blend, cars do need adjustments to run on higher blends, he said. There are no special parts required, but the carburetor must be tuned to mix more fuel with less air, compared with gasoline, meaning ethanol delivers slightly lower gas mileage than gasoline, he said.

Racing is a good marketing tool because it demonstrates high performance, helping to overturn some consumers’ misconception that ethanol delivers low performance, said Mr. Schwartzkopf.

“Before, if people knew about ethanol, they knew something negative,” he said. “Before, ethanol wasn’t as refined, so it didn’t have as good performance. But now it is refined and it works really well.”

Ethanol production is also growing alongside awareness. Mr. Vander Griend said production would hit more than 7.5 billion gallons next year and more than 10 billion gallons in 2008.

“When you add 10 percent ethanol, you reduce tailpipe emissions 20 percent or more,” he said. “Also, it’s made here. It is a domestic product. It’s not a product we have to go to war over. We definitely believe it’s the right thing to do. It’s the right fuel at the right time.”

Contact the writer:JKho@RedHerring.com