Is Ethanol the Answer?
Congress has been far more tentative in dealing with bigger delivery questions. No pipelines exist to move ethanol from the Midwest the way that gasoline is pumped out of the Gulf Coast; rail works well now to transport most ethanol, but 25 percent moves by truck (burning diesel petroleum along the way). As production increases, the transportation strain is sure to worsen.
And even if E-85 were widely available tomorrow, it could be pumped only into the 2.5 percent of the nation's cars that are flexible fuel vehicles. Automakers have pledged to churn out many more, but Congress created a perverse incentive allowing them to produce more gas guzzlers if they manufacture enough flex fuel cars. Carmakers earned enough of a break on their Corporate Average Fuel Economy Standards that the nation will burn 17 billion more gallons of gasoline from 2001 to 2008 as a result.
Thanks to such loopholes and foot dragging on improvement in cafe standards, average new vehicle efficiency has dropped since 1988—a problem that comes home to roost with ethanol. Because of its lower energy content, it takes 1.5 gallons of ethanol to drive as far as 1 gallon of gasoline. Consumer Reports calculates E-85 ended up costing motorists about a dollar extra per gallon last year because of the need to buy more fuel.
Renewable fuels lobbyist Dinneen points out that carmakers could solve the problem with improved engine technology. But with the fleet on U.S. roads now, and gasoline consumption continuing to creep upward, even today's incredible growth in ethanol production barely makes a dent in the nation's oil dependence. Ethanol now amounts to just 4.3 percent of gasoline sold by volume, and just 2.9 percent by energy content.
While corn-based ethanol production has room to grow, the industry acknowledges there's a ceiling—about 15 billion gallons yearly by most accounts, or three times the production in 2006. That's 20 billion gallons short of Bush's renewable fuels goal. Even with alternatives like natural gas vehicles, plug-in hybrids, or hydrogen cars, major advances in ethanol are necessary.
In the laboratory, so-called cellulosic ethanol can be wrung from fibrous materials like cornhusks and rice hulls, as well as fast-growing reedy crops that require little fertilizer or tending, like switch grass, and timber industry excess. This would ease reliance on edible grain and spread the economic benefits beyond corn communities. Another bonus: Biotech enzymes rather than heat energy would break down the cellulose to fuel, reducing greenhouse gases to a fraction of those produced by corn.
But it has never been tried commercially, and it's unlikely that the fuel will go from zero to 20 billion gallons in 10 years. Just to get to 1 billion gallons of ethanol production, the corn industry took 13 years. The government estimates the capital cost of cellulosic is very likely five times that of corn. The expense surely would be driven down if production scales up, but a "chicken and egg problem" exists, says Harkin. "Investors are not investing in cellulosic plants because there's no supply," he says. "And farmers are not planting switch grass or other energy crops because there's no market." He has pledged to "jump-start" both demand and supply with research money and loan guarantees in a new farm bill.
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