Ethanol as Motor Fuel - The Good, the Bad, and the Ugly

Over 140 billion gallons of gasoline per year are burned in automobiles and trucks each year in the United States, producing about 2 billion tons of greenhouse gases. In an attempt to reduce production of greenhouse gases, the US government has instituted massive subsidies (over $1/gallon) for production of ethanol as a partial substitute for gasoline. The Energy Independence and Security Act of 2007 requires that the use of ethanol in gasoline increase to 36 billion gallons per year in the next 15 years. What environmental and economic consequences will flow from these regulatory actions?

Ethanol is generally considered a renewable fuel because the ultimate source of its energy is the light of the Sun, which is converted into usable energy as a plant grows. It is usually used blended with gasoline, and the mix is called Exx, where xx is the percentage of ethanol in the fuel by volume. That is, E15 is 15% ethanol and 85% gasoline by volume. The term 'gasohol' is usually used for compositions between E5 and E25. About 3% of the energy used in land transportation is now provided by ethanol.

Most motor fuel grade ethanol (MFGE) made in the United States for ethanol fuel is made by fermentation. Unfortunately, the techniques that are currently available to make MFGE from corn only convert the starches and sugars in the kernels - thereby wasting over 95% of the available energy in a corn plant (most of which is tied up in the cellulose of stalks and cobs). In the US, the crop of corn from an acre of land is about 20 tons. Of this, less than a ton can be converted into MFGE through fermentation.

Researchers are actively working to develop practical methods for fermenting plant cellulose. Cellulosic ethanol is produced by processes which either break cellulose down into simple sugars, followed by fermentation and distillation, or gasify the cellulose followed by chemical conversion into ethanol and distillation. Cellulosic ethanol has the potential to alleviate many of the energy and environmental problems associated with corn-based ethanol. However, the production techniques are still at the laboratory research level, and the probability of success, energy costs, and environmental impact are currently unknown. Accordingly, we will consider only current fermentation techniques here.

As gasoline and ethanol are different fuels, it is worthwhile to compare a few of their properties.

- Ethanol has a lower energy content than does gasoline, so that 1.4 gallons of ethanol must be burned to replace a gallon of gasoline.

- The amount of greenhouse gas generated by burning fuel must properly include the greenhouse gas which is produced during the extraction, transport, and refinement of the fuel. On this basis, burning a gallon of gasoline produces about 28 pounds of carbon dioxide-equivalent greenhouse gases, while a gallon of ethanol currently produces about 15 pounds. However, ethanol provides less energy when burned than gasoline. Burning the 1.4 gallons of ethanol which provides the same amount of energy as does a gallon of gasoline produces about 21 pounds of greenhouse gases.

- It requires energy to produce, transport, and refine both fuels. Producing a gallon of gasoline requires the energy of about a pint of gasoline, whereas producing a gallon of ethanol (including all steps from farming to distribution) currently consumes the energy of another gallon of ethanol.

These facts suggest that production of ethanol as a motor fuel is currently more a technique to store energy in a convenient liquid form, than a new source of energy. Ethanol may provide new energy when large-scale production of cellulosic ethanol becomes practical, but this isn't clear yet.

I. The Good

Using ethanol to replace a gallon of gasoline reduces the production of greenhouse gases by some 30%. While not the very large improvement suggested by many supporters of the use of ethanol for transportation, this is a notable improvement.

However, consider the scope of the problem. In 2008, about 6.5 billion gallons of ethanol were used in gasohol, which reduced global production of greenhouse gases by about 15 million tons. The total worldwide generation of greenhouse gases is about 30 billion tons. The gasohol-related savings only reduced this total by about 0.05%.

II. The Bad

As mentioned earlier, burning ethanol does not produce any new energy, but in effect transforms the energy required to produce ethanol into a convenient liquid form for transport. However, this energy is largely obtained in the form of electric power, which carries a particularly large environmental penalty, because of low conversion efficiency and the fact that most electric power comes from burning coal.

Ethanol costs a lot at the pump. The wholesale cost of ethanol to replace 1 gallon of gasoline in 2008 was about $3.50. The retail markup for gasoline (the amount added by transportation from the refiner, state taxes, fuel station facilities, payroll, and profit) varies between about $0.50 and $1.00, so that the equivalent retail price for ethanol was between $4.00 and $4.50 to replace a gallon of gasoline. This high price suggests that, in the absence of government subsidies, the addition of ethanol to gasoline would currently be economically infeasible.

On the larger scale, the US produced 6.5 billion gallons of ethanol for transportation in 2007. This was supported by more than $6.5 billion dollars of government subsidies. This saved the emission of 15 million tons of greenhouse gases, but each ton of reduction cost over $400 in subsidies. To put this into context, there is currently a market for companies who produce greenhouse gases to purchase offsets, called carbon credits, from companies whose activities remove carbon from the atmosphere (for example, forest planters). The current price is about $0.50 per ton of greenhouse emissions offset, or about 800 times cheaper than using government subsidies to support use of ethanol. Searching for economically practical alternatives for dealing with greenhouse gases seems a good idea.

III. The Ugly

The 6.5 billion gallons of ethanol produced in 2007 for the purposes of US transportation required the fermentation of about 2.5 billion bushels of corn. This is 30% of the US corn crop, and enough to feed half a billion people for a year. Admitted, most famines have a political basis, but this is still an ugly fact.

It would appear that the current economic and environmental case for producing ethanol for automobile fuel from fermentation of grains such as corn is not well founded. Unrealistic economics and flagrant waste of food products appears to far outweigh the meager benefits of introducing ethanol into automotive fuel at this point. Future policy might better focus government intervention in the market toward faster development of alternate fuels which offer more hope in the mid-term future (e.g., cellulosic ethanol), rather than supporting development of a massive infrastructure for corn kernel-based ethanol production which will be born obsolete.

Learn more about this author, Brian Dodson.
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