Some Clarity on Ethanol

The most controversial issue about ethanol is whether its use is actually a good idea, and therefore worthy of public policy support and environmental endorsement.

Two questions come up again and again:

1. Does the production of ethanol actually yield more energy than is consumed in the process of producing it?

2. Does the use of ethanol in transportation fuels actually reduce emissions?

A recent study by Argonne National Laboratory provides a seemingly convincing case that the answers to these two questions are “Yes” and “Yes”.

Summary of ANL Ethanol study

The study also shows how much better “cellulosic” ethanol approaches are than conventional “corn” (i.e., starch) ethanol approaches. Whereas corn ethanol requires about 0.8 Btu of non-renewable (fossil) energy input for each Btu of energy output, cellulosic ethanol requires only about 0.1 Btu of fossil energy input for each Btu of energy output. (There’s no need to count the “solar” energy associated with growing the feedstock, because it’s totally free.) Correspondingly, the use of corn ethanol reduces greenhouse gases (GHGs) by about 20-30% relative to conventional gasoline, whereas cellulosic ethanol offers a 85% reduction in GHG emissions.

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Although these two entry-level questions can now largely be dispensed with, there are other issues that remain important for ethanol. One is the economics. According to one industry analyst I’ve talked with, corn ethanol is not a very economically-attractive way of reducing GHGs, with an incremental cost of about $300/ton CO2 reduction — much higher than most other emission reduction alternatives. (Of course, the government’s promotion of ethanol is more for reducing oil consumption/imports than emissions.) The economics of cellulosic may be more promising, but are more uncertain.

The other key remaining issue for ethanol is how much of a dent it can make in the nation’s overall petroleum/gasoline requirements. Is there enough land (enough growth potential) to supply a large portion of motor fuel demand? I’ve heard that corn ethanol could supply perhaps high single digits of U.S. gasoline requirements, implying intuitively that cellulosic ethanol might be able to supply a share several times greater. Anyone?

1 reply
  1. Cody
    Cody says:

    When trying to decide the extent to which ethanol is worthy of public policy support, it's important to keep in mind a third question: 3. As compared to what?In other words, we have limited efforts to spend on solving energy problems, so what is the opportunity cost of spending our [investment dollars/R&D time/political capital] on ethanol? This question is not rhetorical – if using corn ethanol implies a 20-30% reduction in GHG emissions, fine, but that along doesn't tell us whether it's worth spending our efforts on.Analysis has yet to convince me that ethanol (especially from corn) is as worth of our dollars today as some of the other means to similar ends (MPG standards, Plugin hybrid development, transportation mode switching, zoning, building end-use efficiency, etc…) and I'd hate to see us spend an unjustifiably large portion of our precious efforts there just because it has been the subject of a successful recent advertising campaign by Ford/GM/Shell/Bush.

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