Corn Ethanol Concerns

Last week’s blog covered possible options regarding different sources for ethanol production.  This week, the current use of corn ethanol will be discussed.  According to the U.S. Department of Energy, half of the gasoline sold in the United States last year contained ten percent ethanol.  Ethanol is advocated as a cleaner fuel than burning straight gasoline, helping meet the clean air standards that were federally mandated several years ago.  The ethanol use in current vehicles is enough to decrease greenhouse gas emissions, especially carbon monoxide emissions, by 30 percent of standard gasoline emissions.

Some limiting factors regarding the current use of ethanol in the United States is the location of E85 vehicles (vehicles designed to use a blended fuel containing 85 percent ethanol), also known as flex fuel vehicles.  There are currently 8 million flex-fuel vehicles on the road, while most of the fuel stations offering E85 fuel are located in the Midwest, especially in the U.S. Corn Belt.  The concentrated location of the E85 fuel limits the ability for the flex-fuel vehicle to take advantage of the cleaner fuel choice, ethanol.  This helps explain the limited about of information regarding the effects of ethanol on a vehicles engine, especially any long term costs or benefits from ethanol use. 

Currently most subsidies are received by ethanol producers, in an effort to provide incentives to invest in this alternative energy source. Retailers and distributors would like to see these subsidies expanded to them as well, with the intention of minimizing the costs associated with offering ethanol products.   Increasing subsidies to more stages of the production and distribution chain would help bring more E85 pumps to areas with an abundance of flex-fuel vehicles.  With the increased access, there would be more opportunity data available on the actual wear and tear resulting from ethanol use.

 Subsidies are just one of the tools that governments implement to encourage specific behaviors.  The United State is looking at developing more renewable energy sources, and U.S. taxpayers are paying the price for this technology to be developed.    While providing subsidies to encourage ethanol production and research are current trends, thorough analysis of the industry is still needed.  Consequently, subsidizing ethanol is not a long run equilibrium, and many are wondering if the current corn ethanol will ever be self-sustainable without government support. 

A Cornell professor, named David Pimental, studied the energy efficiency of our current ethanol production system.  According to his results, a gallon of ethanol produces 77,000 BTU of energy.  However, the amount it takes to actually produce a gallon of corn ethanol is 131,000 BTU of energy.  With a negative net energy return, corn ethanol does not appear to hold much promise for future energy independence.  The same article estimates that 11 acres of corn would be needed to fuel a single vehicle for an entire year, the same amount of acres that would feed 7 people (Business Ethics, June 2010).

With increased data regarding ethanol production, there will be time spent looking into developing systems for other sources, like those mentioned in last week’s post.  Until then, the U.S. will have to decide if the cost of valuable tax-dollars is worth the investment into corn ethanol.