Frequent and often heated debate has erupted over the movement toward—and heavy subsidization of—biofuels in general, and ethanol in particular. Proponents tout the creation of a domestically produced fuel produced from renewable materials and improving economics. Naysayers emphasize the diverting of food crops to produce ethanol, causing upward pressure on food prices. There are also problems relating to the lower fuel value of ethanol and its inability to be blended with gasoline at levels greater than about 10%-15%. Let’s look at some of these pros and cons in more detail.
First there is The Good. Ethanol is a fuel that can be produced now with existing technology, and there are some valid reasons to produce it. Produced domestically, bio-ethanol serves to both replace oil and decrease our dependence on imported oil. Every gallon of fuel ethanol replaces a bit less than a gallon of gasoline that otherwise would come from petroleum. Irrespective of net energy arguments, using and importing less oil is a good thing. A second touted benefit is economic. While ethanol is not competitive with oil at under around $70-90 per barrel, it does help to place a cap on the price of oil as long as we have a sufficient supply of ethanol to use. This would support an argument for some subsidies so that ethanol is available as a credible substitute for oil.
But then there is The Bad. The main problem currently is that most ethanol used in the USA is derived from corn (In Brazil it comes from sugar cane and a lot of land is being de-forested and converted to sugar production). Thus, there is upward pressure on food prices caused by diverting corn to produce fuel ethanol rather than food and exacerbated by diverting land away from food production to fuel ethanol production. This should only be a temporary condition, however. Virtually everyone realizes that producing ethanol from corn is not a tenable long-term strategy, but rather, is a stop-gap measure for providing ethanol now. Once the cellulose-based technology has been sufficiently developed and is competitive, most corn-based ethanol should be converted to cellulose-based production. Within 2-5 years, the displacement of corn by cellulose-based technology should be underway, and upward pressure on food prices due to fuel ethanol production will abate.
Economics are different matter, however. Ethanol has only about 60% the fuel value of gasoline; thus, a crude calculation using simple energy content measurements says mathematically that we need about 1.6 gallons of ethanol to equal the fuel equivalent of one gallon of gasoline. Based on current production methods, the cost of just the sugar (derived from corn) to produce 1 gallon of ethanol is about $0.80-1.00. Adding costs to isolate and refine the ethanol raises the overall cost rises to about $1.50/gallon or more, which after adjusting for the lower fuel value translates to about $3.00 per gallon equivalent of gasoline once it reaches the gas pumps. Cost reductions will be made over time, but ethanol is not yet on an economic par with petroleum-derived gasoline as a transportation fuel.
Then finally, there is The Ugly. Ethanol is also not as easily transported as gasoline from the production plant to the pump due to its tendency to absorb water from the atmosphere. Existing pipeline infrastructure cannot be used, and requiring special pipelines to be constructed (and this will add to the cost). Ethanol is also corrosive. It is, in fact, illegal as well as unworkable to use ethanol as an aviation fuel for this reason. And then there is the problem of the “blend wall.” Car engines require modification to use ethanol in blends higher than about 15%. Automakers will likely void the warranties for engines that have used gasoline blended with higher percentages of ethanol. All these problems illustrate the impracticality of ethanol as a transportation fuel, and argue for other fuel compounds that do not have these problems—for example, higher alcohols such as butanol or hydrocarbons, which can also be produced by the fermentation of sugars. These significant drawbacks lead to the inescapable conclusion that ethanol is a poor choice as a fuel, and should be replaced as soon as efficient processes to produce alternative fuels, such as butanol or hydrocarbons, have been developed.