The growing - and surprisingly large - ethanol movement

The search for alternative fuels is moving fast and furiously this week at the National Ethanol Conference in Orlando. Or, in the words of Energy Department Undersecretary for Energy Efficiency and Renewable Energy Alexander Karsner: "Acting with a sense of urgency to develop alternatives to traditional energy supplies is no longer optional." Risks to traditional petroleum supplies have never been higher and are still growing, he says.

That seems to be the conclusion of a surprisingly large contingent of ethanol investors, producers, corn farmers, and advocates gathered here at the conference. Estimates range from 2,000 to 2,700 of them are in attendance.

No surprise, much of the reason for all the interest is financial: Last year's Energy Act included a provision requiring the production of 30 billion gallons of ethanol to be blended with gasoline by 2020.

The ethanol industry is putting its collective efforts into marketing a blend of ethanol called E85, so-named because it is 85 percent ethanol and 15 percent gasoline. A promising supplement to gasoline, there are many sides to E85. For instance, when we tested a flex-fuel Chevrolet Tahoe running on E85 in 2006, we found its fuel economy dropped 27 percent overall, compared with running on gasoline. Likewise, there is debate over the net energy benefits of creating fuel from food crops, with some analysts questioning the energy return when factoring the petroleum used in farm machines and for transporting.

Some stations sell E85 for less than gasoline, while others charge more, hitting consumers with a double-whammy: more fuel cost per gallon and less efficiency. Availability and pricing may change as competition heats up in the ethanol market. Today, only a small fraction of gas stations carry E85, but the number has been growing.

Two recent announcements may push that trend along. The first came last October, when Underwriters Laboratories adopted a safety standard for E85 fuel pumps. Since ethanol is more corrosive than gasoline, some station owners were concerned that ordinary gas pumps could fail when pumping gasoline. The organization says it is now testing the first commercial E85 fuel pumps and expects them to be available later this year.

Then in December, Congress passed amendments to a law called the Petroleum Marketing Practices Act, forbidding oil companies from restricting the sale of E85 at their franchised gas stations. Some franchise contracts had effectively forbidden the sale, or forced E85 pumps to be located away from other pumps. With those two obstacles eliminated, more gas station owners may consider E85. However, building infrastructure to transport enough ethanol to fuel cars nationwide remains a challenge.

In addition to E85, ethanol is sold in a 10-percent blend with gasoline known as E10 at most gas pumps around the country. Karsner also revealed that the Energy Department is studying setting additional standards for intermediate blends of E15 and E20 to absorb increasing ethanol supplies and decrease gasoline demand.

The jury is out on whether ethanol saves money or not. Undersecretary Karsner says without mixtures of ethanol in gasoline today, gas prices might be even higher. But like any emerging environmental technology, the costs are likely to come down as supplies grow.

So far, according to Dow Jones and USA Today pollster Bruce Scherr, the problem most Americans have with ethanol is they don't know about it. But they support the idea of a domestically produced fuel that can substitute for oil. Today, the United States produces more ethanol than it imports oil from Iraq. (To see where we import oil from, read "The drive for energy independence.")

To learn more about ethanol and alternative fuels, visit our green cars and fuel economy hub. In the meantime, tell us how you feel about ethanol and what would make you switch to using it instead of gasoline in the comments below.

Watch for a future installment on ethanol production and its connection to rising food prices.

—Eric Evarts

Comments

[Rob]

I don't have anything really against ethanol. Once it started to become popular in transportation circles, I figured it was inevitable that the agricultural giants of the country would do more than their share to make it the fuel of tomorrow. But I also place a high priority on eliminating the use of crude oil, imported or otherwise, as the primary driver of our vehicles. Ethanol gets us a step in that direction.

Where I'd really like to end up is in the land of plug-in hybrids. As a daily commuter, a range of 100 miles per day is more than enough to get me to and from work and various errands. And with the efficiency of the electric grid and potential for carbon-neutral or renewable sources of electricity to be located on the grid (solar, nuclear, wind or otherwise), I find that to be much more environmentally acceptable than the smog-generating 4-stroke cylinder engine in my car right now.

[Bill]

My family has been driving a focus and a prizm since e-10 became popular in Iowa. I have not noticed any corrosive problems with the fuel. However, do not use it in things like lawnmowers and weedeaters since their internal plastics have not been configured to resist the alcohol. The alcohol gives a boost to the octane rating (not much) it also prevents gas line freeze up which use to be a real problem in the winter.
We have an ethanol plant near me and the energy that is used in the production of ethanol is mostly coal. Which comes from Wyoming instead of Caracus or Tehran.

[poetryman69]

Stop funding the terrorists!

No more Oil Wars!

Energy Independence Now!

Drill in Anwar.

Build more nuclear power plants

Use More coal.

Use more natural gas

Turn trash into energy

Double the efficiency of windmills and solar cells.

If France can do nuclear power so can we.

If Brazil can do biomass/ethanol power so can we.

If Australia can do LNG power so can we.

Domestically produced energy will end the recession and spur the economy.

Stop paying oil dollars to those who worship daily at the alter of our destruction.

Preserve our Civil Rights and defend our Freedom by ending dependence on foreign oil.