Ten things to know about ethanol:
- Ethanol is grain alcohol (fermented and distilled corn mash) with a nasty additive to render it undrinkable. Without the additive, ethanol is just plain old moonshine.
- Ethanol is already blended into gasoline nationwide for emissions reasons. Cars can run on low blends of it (10% ethanol, called E10) without any modification or damage to the engine. U.S. carmakers have been building vehicles that run on 85% ethanol (E85) for years to get federal fuel economy credits.
- A gallon of E85 has only about two-thirds the energy of a gallon of gasoline. The U.S. Department of Energy says a vehicle has to use 1.4 times as much E85 as gasoline to go the same distance. If a car gets 30 mpg with gasoline it will get 22 mpg with E85. When comparing pump prices, an E85 pump price that is 72% the price of gasoline will result in equivalent driving distances.
- E85 stations are scarce, especially outside of the Midwest. Part of this is due to transportation (see #10) and part is that when Ethanol is mixed with gasoline it results in a higher evaporation rate. This forces refiners to dramatically alter their gasoline formula to compensate for the increased evaporation, and this varies by geography. For instance, a gallon of E85 sold in Florida must have a different mixture than a gallon sold in Michigan for any given day of the year.
- The federal government makes ethanol possible, with a mandate that says the U.S. must use 7.5 billion gallons per year by 2012 and subsidies of 54 cents per gallon. Even 8 billion gallons of ethanol will do almost nothing to reduce oil imports; America burned more than 134 billion gallons of gasoline last year. By 2012, those 8 billion gallons might reduce America’s overall oil consumption by 0.5 percent.
- Beyond subsidies, the economics of ethanol hinge on two things: The price of oil and the price of corn. If the price of oil falls below $35 per barrel, or if corn rises to $3.50 or so per bushel, ethanol economics break down. As ethanol production from corn increases, the demand for corn will increase and, therefore, the price of corn will increase. The current price of corn can be found here.
- Ethanol doesn’t have to come from corn. Almost any plant matter can be fermented. Brazilians ferment so much sugar cane into ethanol that the country no longer needs to import oil.
- Ethanol — at least from corn — won’t do much to reduce U.S. dependence on fossil fuels and foreign oil. There isn’t enough land to grow the corn needed, and the process of fertilizing, applying pesticides, harvesting, fermenting, distilling and transporting corn and ethanol takes lots of natural gas and diesel.
- Water use by ethanol plants largely comes from evaporation during cooling and wastewater discharge. As a rule of thumb, water utilization is 10 gallons per minute for each 1 million gallons of yearly ethanol production. Thus a typical 50 million gallons per year ethanol plant would need 500 gallons per minute of water.
- You can’t transport ethanol in oil pipelines, because oil-pipelines aren’t water-tight. That’s no problem if some water gets into the gas pipeline, because oil and water don’t mix. The water can be easily separated out at the end of the pipeline. But, ethanol and water do mix, and that’s bad for the ethanol and vehicles that would use water-contaminated ethanol fuel.