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What is ethanol?

By Kevin G. Hall ( Knight Ridder Newspapers )

During his State of the Union speech, President Bush declared that we might as well face it, America's addicted to oil. He certainly wasn't the first to say it. Jimmy Carter, Gerald Ford and Ronald Reagan said much the same. And yet, aside from Carter, who promoted gasohol during an era of high gasoline prices, no president did much to push for an alternative to gasoline.

Until George W. Bush. Facing high oil and gasoline prices that when adjusted for inflation are approaching pump prices from the 1970s, President Bush is using his bully pulpit to call for new technologies to reduce oil consumption. Among the most touted alternatives is ethanol, an alternative fuel made from corn in the United States and sugar cane in Brazil.

Ethanol isn't new. It's been a staple for Midwestern agricultural states like Iowa and Minnesota. But since Bush's January address, which was followed by sky-high oil and gasoline prices, Americans have been talking about ethanol. So much so that Detroit is spending millions on TV and print ads that tout so-called flex-fuel vehicles that can run on gasoline or ethanol.

Congress and the Bush administration are rushing to aid the small but growing ethanol industry. For example, the Internal Revenue Service recently published rules that will allow for a 30 percent federal income tax credit, up to $30,000 per property, for the installation of fuel pumps that dispense alternative fuels. This effort to provide more ethanol infrastructure came out of the 2005 Energy Policy Act passed by Congress.

what is ethanol

That legislation requires gasoline refiners to incorporate 4 billion gallons of ethanol into their product this year as an additive to make cleaner-burning fuel, and 7.5 billion gallons by 2012. Virtually any car can run on a gasoline blend that contains up to 10 percent ethanol.

For now, ethanol is mostly a blending source to help lower the amount of oil consumed while providing for cleaner-burning fuel. But over time, it could grow in importance as an alternative fuel called E85. That's a blend of 85 percent ethanol and 15 percent gasoline, the mix preferred for flex-fuel vehicles.

The key to ethanol's future will be oil and gasoline prices. If they remain high for a long stretch of time, it will provide the push needed for investors and large corporations to get behind ethanol as an alternative fuel. If new conventional oil supplies grow globally, and gasoline prices fall sharply, it could leave ethanol as a congressionally mandated additive to the nation's gasoline supply.


Q: What is ethanol?

A: Ethanol is an alcohol-based fuel made by fermenting and distilling crops that have been broken down into simple sugars. In the United States, ethanol is generally made from starch crops such as corn or sorghum. In fact, ethanol production consumed about 11 percent of all U.S.-grown corn in 2004. That number is expected to grow sharply in coming years. In Brazil, which rivals the United States in production numbers, ethanol is made from sugar cane. To provide incentive to its ethanol industry, Brazil has set a goal of having all vehicles on its roads able to run on ethanol or gasoline in the next few years.

Q: What is the next-generation ethanol President Bush talks about?

A: Bush backs cellulosic ethanol, sometimes called biomass. This involves biologically engineered enzymes that can break down virtually any plant fiber for conversion into ethanol. And, cellulosic ethanol can use lignin, the dry mass of the plant, to burn as a power source for bio-refineries. Two companies - Genentech Inc. in South San Francisco, Calif., and Iogen Corp. in the Canadian capital of Ottawa - say they are now able to mass-produce these enzymes but would like the Bush administration to get behind a chosen feedstock. Some backers want to use widely available corn stover while others prefer switchgrass, a naturally growing prairie grass that offers high yield per acre.

Q: How much ethanol would be needed to replace gasoline?

A: The Energy Department estimates that Americans will consume 120.4 billion gallons of gasoline annually by 2025. The potential for conventional ethanol is projected at 15 billion gallons, or 12 percent of what America would consume. Cellulose-to-ethanol production potential is pegged at 100 billion gallons. That gets close to projected consumption levels.

Q: Doesn't ethanol have drawbacks?

A: Several. Right now, there are less than 650 fueling stations for E85 ethanol, mostly in the Midwest. Compare that to 167,000 filling stations nationwide that sell gasoline. To compete with gasoline, an entire pipeline network would need to be constructed, or a virtual pipeline with dedicated tank trucks and railcars. Also, large-scale bio-refineries would have to be built. In many parts of the nation, ethanol is as expensive or more costly than gasoline. Ethanol is harder to ignite in cold climates, and experts argue the percentages, but cars running on E85 get 10 percent to 20 percent fewer miles per gallon than on gasoline.

Q: Will E85 ethanol cost less?

A: It depends where you are. In some Midwest states where ethanol is produced, it can cost around 60 cents less per gallon than gasoline. But since there are so few filling stations with ethanol right now, those stations far from production centers cost more than gasoline and give drivers fewer miles per gallon.

Q: Does using ethanol help the environment?

A: Yes and no. It burns cleaner than gasoline so it emits fewer greenhouse gases. But the planting, maintenance and harvest of corn and other ethanol crops requires diesel fuel and petroleum-derived products like fertilizers and pesticides, so this starts to erode some of ethanol's benefits. But as ethanol technology develops, and genetically modified crops are planted in greater numbers, production is expected to become less energy intensive.

Q: How long before ethanol becomes widely available?

A: As a blending stock, it already is widely used in the nation's gasoline, and that is expected to increase as congressional mandates increase the use of ethanol for blending. General Motors, a leading maker of flex-fuel vehicles, believes E85 ethanol presents a chicken or egg dilemma. It's making 400,000 new flex-fuel vehicles across nine product lines this year and will keep up that pace. But it won't go completely to 100 percent flex-fuel because there just aren't the ethanol pumps to support it. No one knows whether the tipping point comes from a greater number of flex-fuel cars or a greater number of available ethanol pumps.

Glossary terms

Ethanol: An alcohol-based alternative fuel usually made from corn. Starches are broken down into sugars, fermented and distilled to produce an alcohol product. Henry Ford's Model T ran on a version of ethanol.

Cellulosic ethanol: Uses biologically produced enzymes to break down just about any kind of plant fiber into a final ethanol product.

Flex-fuel vehicles: Cars and trucks that can run on either gasoline or E85 ethanol. There are more than 5 million flex-fuel cars on U.S. roads, but most are being run on gasoline.

E85: A blend of 85 percent ethanol and 15 percent gasoline that's used in flex-fuel vehicles.

E10: A gasoline blend that contains up to 10 percent ethanol. Many gasoline refiners now use ethanol as an alternative to oxygenates that reduce fuel emissions.

MTBE: Methyl tertiary butyl ether is an octane booster and oxygenate that's blended into gasoline. It was encouraged under federal Clean Air laws but has fallen out of favor after being linked to groundwater contamination and is being replaced as a fuel additive by ethanol.

Bio-refinery: Analogous to a petroleum refinery that turns crude oil into gasoline. Bio-refineries integrate a conversion process that turns corn, sugar cane or even naturally growing switchgrass into fuels and chemicals.

Lingin: The dry, fiberlike noncellulose part of plant waste or a plant product that can be used to run a bio-refinery that makes ethanol.

Flex-fuel vehicles

About 5 million cars on U.S. roads right now can operate on ethanol. They're called flex-fuel vehicles and are virtually identical to gasoline-only cars. Engines are modified to use a sensor in the fuel line to control fuel injection. Brazil, a pioneer in both ethanol and flex-fuel cars, is nearing a goal of having all domestically manufactured vehicles be able to run on gasoline or ethanol. And, among those domestic carmakers are Ford and General Motors.

In the U.S. market, there are more than 30 different makes of flex-fuel vehicles. Ford Motor Co. this year began making a flex-fuel version of its popular F-150 pickup, and expects to manufacture 250,000 flex-fuel vehicles in its wide product line in 2006. GM has aggressively marketed its flex-fuel vehicles with a "Live Green, Go Yellow" campaign seen during the Super Bowl and the Winter Olympics.

Because they can run on gasoline or ethanol, there is no real drawback to flex-fuel vehicles. But fewer than 650 filling stations nationwide offer E85 for flex-fuel cars.