Print options

May 10, 2014

Alternative Fuel Ethanol Hits a Wall

by Steve Baragona

When U.S. drivers fill their tanks with ethanol, they are essentially buying fermented corn grown by American farmers. 

A 2007 law requires gasoline makers to add increasing amounts of the biofuel to the U.S. fuel supply. With petroleum-based fuels contributing to climate change, advocates have backed plant-based biofuels as a greener source of energy.

However, rising costs and competition for resources have led some regulators to propose a reduction in the ethanol requirement.  

Ethanol boom

The 2007 law sparked an ethanol boom that has boosted rural economies. 

Another benefit, according to Bob Dinneen, head of the ethanol trade group the Renewable Fuels Association, is that corn absorbs the greenhouse gas carbon dioxide as it grows. 

“We are produced from agricultural crops and residues that are taking carbon out of the air, something petroleum can’t claim,” Dinneen said.

But ethanol has a flock of critics. Poultry and other meat producers say their animals are now competing with ethanol for the corn supply. That has raised corn prices and costs for raising livestock.

“Eventually these higher costs borne by the industry have to be passed along," said Hobey Bowen, president of the Virginia Poultry Federation. "So, this policy has contributed to inflation, food inflation.”

Too much to handle

Another factor may also put a lid on ethanol’s growth. 

“There’s more ethanol in the gasoline required by the mandate than the vehicle fleet and fueling infrastructure can handle,” Patrick Kelly, a policy advisor for the American Petroleum Institute.

Here’s why. Most U.S. gasoline currently contains 10 percent ethanol. Raising it to 15 percent would be one way to meet the law’s requirements. But some cars may not be able to handle a higher mix of ethanol.

“If you have a car that was designed to use E-10, and that fuel pump [in your car] is not compatible with E-15, it could leave you on the side of the road stranded,” Kelly said.

So the U.S. Environmental Protection Agency is proposing to lower the ethanol requirement for this year. 

Going backwards?

Dinneen, of the Renewable Fuels Association, says that's a bad idea.

“It’s going backwards on our energy policy, not forwards,” he said.

Dinneen says Congress passed the law intending to drive major changes in where the United States gets its fuel. One side effect, for example, is that car companies now make some models that can run on up to 85 percent ethanol.

“If you’re going to have ethanol replacing gasoline, if we want to have options other than fracking and drilling deeper and deeper in the Gulf [of Mexico], we have got to assure investors that there is going to be a market for these new advanced biofuels,” he said.

These new biofuels can be made from garbage, corn cobs, or other plant matter, which could end the food-versus-fuel debate. 

What fuels our cars in the coming years may hinge on EPA’s final decision, expected in June.