Seems like this is one of the best kept open secrets out there.
The other "secret" is the energy level of Ethanol. "Ethanol’s energy content is significantly less than gasoline’s. You need 1.5 gallons of ethanol to drive the same distance you go on a gallon of gasoline."
The Ethanol Illusion
Can we move beyond an energy policy running on hype and hot air?
by Michael B. McElroy
Harvard Magazine
Americans’ annual consumption of gasoline (for both private and commercial transportation) amounts to more than 140 billion gallons—close to 500 gallons for every man, woman, and child in the country. With gasoline prices up by almost a third over the past year, the annualized bill for gasoline (direct and indirect) for a typical U.S. family of four is now more than $5,000, a burden that falls disproportionally on those least equipped to bear it. Not surprisingly, there has been a political reaction. Leaders of the major oil companies have been summoned to testify in Congress and there are calls for a windfall-profits tax. But the price of gasoline is linked inevitably to the price of oil, and there is little Congress or the oil companies can do about that, at least in the short term. Geopolitical considerations, notably the instability in the Middle East, and international market conditions (increased demand from China and India, political uncertainties in Russia and Venezuela), determine the price of oil, recently at an all-time high of close to $78 for a 42-gallon barrel of crude.
But there is a solution, some would claim. Why not replace gasoline with ethanol, the stuff that adds zip to your beer and your gin and tonic, a fuel produced from homegrown corn? After all, more than 40 percent of the world’s corn is grown in the United States, which can legitimately claim to be the world’s most efficient agricultural economy. Corn grows by drawing carbon dioxide from the atmosphere through photosynthesis. Won’t that offset concerns about increasing levels of greenhouse gases and consequences for global warming? How can we pass up an option that appears to have benefits not only for the farmer and the consumer but also for the environment—and also enhances national security by reducing our dependence on imported oil? Attracted by these visions, subsidies have been lavished on corn-based ethanol, and investors are rushing to boost production.
But unfortunately, the promised benefits prove upon analysis to be largely ephemeral. It is urgent that we understand the realities before proceeding headlong toward corn-based ethanol as the solution to American energy woes.
To begin with the facts: Some 3.9 billion gallons of ethanol were produced from corn in the United States in 2005, and sold as a blend with gasoline that accounted for 2.8 percent of total gasoline sales by volume in that year. But here’s the rub. Ethanol’s energy content is significantly less than gasoline’s. You need 1.5 gallons of ethanol to drive the same distance you go on a gallon of gasoline. So on an energy basis, the savings in gasoline associated with U.S. ethanol use in 2005 amounted only to 1.9 percent of total gasoline sales. The wholesale price of gasoline in the United States in the spring of 2006 was about $2.20 a gallon (with retail prices closer to $3.00 a gallon). For ethanol to be competitive economically, it would have to sell for less than $1.50 a gallon. Yet by May 2006, the wholesale price of ethanol had risen to $2.65 a gallon (or in reality $3.16 a gallon, if you allow for the subsidy of 51 cents a gallon authorized by Congress in 2004 to encourage production). The wholesale price of ethanol in corn-producing states such as Illinois was $3.10 a gallon in July 2006; in California, it had increased to $4.00 a gallon. Allowing for the subsidy and the lower energy value of ethanol, this meant that motorists in California were paying more than $6.00 for enough ethanol to obtain the energy equivalent of a gallon of gasoline! harvardmagazine.com |
