To: Zoltan! who wrote (246333 ) 4/9/2002 2:02:39 PM From: Gordon A. Langston Read Replies (1) | Respond to of 769670 This page contains some of the pertinent facts. Ethanol production in the United States grew from 175 million gallons in 1980 to 1.4 billion gallons in 1998, with support from Federal and State ethanol tax incentives. Ethanol has also enjoyed some success as a gasoline volume extender, an oxygenate in high-oxygen and reformulated gasoline (RFG) in some markets, and an octane-enhancer. However, the current production of ethanol from corn is a mature technology that is not likely to see significant reductions in production costs. Substantial reductions in ethanol production costs may be made possible by replacing corn with less expensive cellulose-based feedstocks. Cellulosic feedstocks include agricultural wastes, grasses and woods, and other low-value biomass such as municipal waste. Although cellulosic feedstock materials are less expensive than corn, today they are more costly to convert to ethanol because of the extensive processing required. Currently, the cost of producing ethanol from cellulose is estimated to be between $1.15 and $1.43 per gallon in 1998 dollars, compared to $1.10 per gallon for ethanol produced from corn and to today's wholesale price for gasoline of between $0.80 and $0.90 per gallon. Advances in feedstocks processing and biotechnology could, over the next two decades, reduce cellulose-based ethanol costs to between $0.69 and $0.98 per gallon, partly by using genetically engineered bacteria in the fermentation process. If the 54-cent per gallon Federal subsidy for ethanol is extended beyond its current 2007 expiration date through 2020, the reference case projects an increase in total corn and cellulose ethanol production of 73 percent from the 1.6 billion gallons expected in 2000 to 2.8 billion gallons in 2020. In the low-technology development case, production rises to 2.3 billion gallons through the end of the forecast period. The high-technology development case projects ethanol to become economically competitive with gasoline and production rises to 4.2 billion gallons in 2020. Biomass ethanol production alone in 2020 is projected to be 850 million gallons in the reference case (See Figure).eia.doe.gov