mog

Whatever Happened to Those Ethanol Companies?

Many of the corn to ethanol plants that started up a few years ago are going away again. No big surprise there, it happened thirty years ago, in just the same way.

As then, there are a number of reasons besides cheap oil. However, two of the biggest reasons never get discussed. We don't really have a market for ethanol. I know about flex fuel cars and E85 pumps all over Minnesota and Iowa, and the oil companies that blend alcohol into gasoline to boost octane. That's not much of a market.

Besides some prototype engines [from SAAB, Caterpillar, MIT, Ford, Ricardo, DELPHI….] there aren’t cars for dedicated ethanol use, and that is a shame. There have been decades [literally since the age of lamplight] of criticism against ethanol, and what has been lost to all but the engineers who design motors are the benefits it offers.

Ethanol is cleaner and cooler burning, less toxic, higher octane, less sensitive to mixture, has lower airflow requirements. Ethanol engines are as efficient as diesel engines, but cleaner, in a lighter, quieter, cheaper engine.

We don’t have cars like that, which is tragic, really. Only race car builders and some engineers will ever know what an engine designed for ethanol fuel can do, but that is politics and PR and, to some extent, technological progress and economics.

We may be really close to another, maybe our last, oil crisis, but I don’t think that alcohol engines will be built for that crisis. Technology is making electric cars the better choice in too many ways for alcohol to gain a foothold, except as a component in a new generation of ‘gasoline’. Since gasoline is a generic name, and not a specific chemical compound, it can be made from a blend of alcohols, without petroleum.

Ethanol Update: Challenges and Opportunities

Several things to note:

It has been established that corn ethanol contributed less to high prices than other factors, including high shipping costs due to petroleum prices. It happened to be convenient for the multinational food and petroleum industries that there was a surge in ethanol production at the time. Any number of graphs and charts using real figures on the small percentages of corn actually used for ethanol will show a different story than the one we have all heard repeatedly on the "News."

Prior to NAFTA, and the flooding of Mexico with cheap corn, there was more domestic corn production and less reliance on US corn.

The dead zone in the Gulf is due to algal blooms. What is the newest craze in fuel production, particularly for those hoping for a renewable to be the mascot for "Green Gasoline"? Algae.

If Baucus's tax changes in the "Health Care" bill strip out all the tax incentives and breaks for petroleum companies, tie some tax perks to using Gulf algae for their "Renewable Petroleum" projects.
I don't like Baucus and others putting petroleum subsidy elimination into a "Health Care" bill, but the end of those tax breaks, special rules, and perks is long overdue. Without those funds, the question changes 180 degrees, to "Will gasoline be competitive with alternative fuels?"

I have watched this issue since the late 1970's, and talked with people who remembered the same issues from the WW2 era and before. In the 70s and 80s, a lot of time was spent advertising all the things that were being done to extract oil from this or that unlikely source. A few of those have worked, many more have made less progress than cellulosic ethanol has in the same amount of time. Given the disparities between the R&D tax breaks on petroleum, and the much-talked-about pittance granted to alternative energy sources, one wonders if the petroleum industry is serious about anything but stock prices.

The problem has always been one of pointing fingers. The pot is forever calling the kettle black, from within the alternative fuels world and without, the result being that nothing gets done and the status quo is left to roll on, belching smoke all the way. While countless gallons of crude spill in Australia, on the Alaskan Tundra, into the oceans around off-shore rigs, the net abounds with people talking about ethanol being dirty.

While electric cars are the new fad, and politicians who can't tell Lignite from Anthracite from Uranium talk about "Clean Coal", our electrical power generation produces more pollution than all the gasoline powered cars on the road.

Marketwise, will ethanol ever take the lead? Publicity wise?
Not until an ethanol engine is built that gets fuel mileage akin to a hybrid or diesel. The answer is not political or economic.
Just like the crisis in the US right now, the answer is to put people to work. Forget the politics and economics. Build the engines. Stop playing with engines built for gasoline or diesel, build ethanol engines, market the cars in areas with a lot of ethanol support, and you build demand. Build demand, and you need a supply. Corn will become too expensive to meet demand, just as oil demand outstripped domestic production fifty years ago.