Energy Beat
What Is Ethanol, Anyway?
By Kenny Warren NSBE Magazine
Ethanol, a liquid fuel made from corn or other agricultural products such as sugar cane, is becoming an increasingly common part of our nation's fuel supply. Last year, Congress mandated the use of biofuels such as ethanol as a way of reducing oil imports and providing increased support to the agricultural sector.
Ethanol now enjoys a federal tax subsidy of $.51 per gallon and is protected by a tariff on imports of $.54 per gallon. Without the federal subsidy and on an energy-equivalent basis, corn-based ethanol is competitive with gasoline at about $5.00 per gallon retail. Longer term, ethanol prices will depend on supply, demand and production costs.
As fuels suppliers comply with the ethanol mandate, more and more consumers will be using this product in a gasoline blend called "E10," which contains up to 10 percent ethanol; just check the label on the pump the next time you fill up. No vehicle modification is needed, as conventional vehicles can accommodate blends of up to 10 percent ethanol.
Today, the U.S. uses about four billion gallons of ethanol per year. According to the Congressional mandate, this will rise over the next six years to 7.5 billion gallons in 2012, which will consume about 20 percent of the U.S. corn harvest. However, even if all of the corn grown in the U.S. today were used for ethanol, it would only replace about 15 percent of the gasoline we now use. Obviously, that is not feasible, as corn is a basic ingredient in the food supply as well. But this statistic does highlight the limited potential of corn-based ethanol for motor fuels.
E10 or E85?
Some have called for expanded use of ethanol through an ethanol-based fuel called "E85." E85 is fuel that contains 85 percent ethanol and 15 percent gasoline. It is a very different product from E10. For example, E85 is not compatible with conventional vehicles and can only be used in specially designed "flexible fuel vehicles" (FFVs), which only constitute about 3 percent of the nation's current vehicle fleet. In addition, E-85 is not compatible with most of the service station fuel dispensers in use today.
One of the limitations of ethanol as a vehicle fuel is that ethanol has only two-thirds of the energy content of gasoline. For E10, this does not have a significant effect. However, using E85, you will get significantly fewer miles per gallon than you will using gasoline without ethanol. Information available from the U.S. Energy Information Administration shows that when ethanol's lower energy content is factored into the cost, E85 will be more expensive than gasoline for the foreseeable future.
How Much More?
Data available in the Environmental Protection Agency's 2006 Fuel Economy Guide (available at www.fueleconomy.gov) show that the average FFV using E85 will increase consumer fuel costs by about $400 per year when compared with gasoline-fueled vehicles.
Technology and cost breakthroughs such as biomass-derived ethanol (i.e., "cellulosic ethanol") are needed for ethanol to compete effectively in scale and cost with hydrocarbon-based transportation fuels such as gasoline.
As we continue to consider the role ethanol will play in our nation's energy future, we should keep these issues in mind. Fuels that are cost — and energy — efficient are the ones most likely to be favored by consumers.
Kenny Warren is Global Aviation director for ExxonMobil. He represents ExxonMobil on NSBE's Board of Corporate Affiliates. Please send your comments about this article to editor@nsbe.org.
Print | posted on Sunday, August 19, 2007 10:07 AM