The hand-wringing and soul-searching that has gone on at the US EPA regarding a proposed reduction in the amount of ethanol to be blended in the gasoline in 2014 is emblematic of a policy based on optimistic projections divorced from reality.
It began with establishment of the Energy Policy Act (EPACT) of 2005 with the desire to reduce the US dependence on imported oil and to reduce emissions of anthropogenic CO2. Ethanol could be considered a “carbon-free fuel,” since its combustion would only be emitting the CO2the plant had used in the photosynthesis process. Ethanol is produced by the fermentation of sugar using yeast. The sugar may be obtained by expressing it from sugarcane, or by hydrolyzing the starches from crops such as corn.
In the US ethanol is produced mostly from corn, and there is an inherent attraction to the notion of growing one’s own fuel instead of importing it. An additional benefit of EPACT was that it provided US farmers with an opportunity to grow a lucrative cash crop and thereby support the farming industry. There was already a movement afoot in the US to eliminate the use of MTBE in gasoline, and using ethanol as an alternate oxygenate provided a straightforward mechanism to increasing the use of ethanol.
The EPACT required that 10% by volume of ethanol be blended into gasoline. The 10% level was in practice at many locations, and was found to work well with the existing automobile fleet. US gasoline consumption in 2004 was about 130 billion gallons a year, and that meant that ethanol production should rapidly increase from the then 3.4 billion gallons a year to about 13 billion gallons. The act spurred major investments in the biofuels industry, and the installed capacity for corn ethanol grew rapidly.
Over the next few years it became abundantly clear that production of corn ethanol required substantial quantities of fossil energy: fertilizers to grow the corn, diesel for the tractors and other farm machinery, and natural gas or coal for the distillation. Depending on the specifics of the farming practice and processing details the energy return on fossil energy invested (EROI) was found to vary between 0.8 and 1.5, which meant that corn ethanol hardly added to the total pool of energy, although it did provide a storable liquid fuel. Likewise, studies on the life-cycle emissions of CO2from using corn ethanol showed that CO2 emissions could range between 0.7 and 1.3 times that of petroleum-based gasoline. In other words, greenhouse gas emissions could be marginally better or somewhat worse than petroleum, a far cry from the promise of being a carbon-free fuel. Moreover, production of corn ethanol competed for the land and water resources used for growing food or feed, and thus contributed to increasing food prices.
Ethanol can also be produced from lignocellulosic materials, and life-cycle analyses showed that cellulosic ethanol had a markedly lower carbon footprint and a more favorable EROI. The estimated availability of a billion tons of sustainably harvested lignocellulosic materials such as agricultural and forestry residues raises the potential for producing over 200 billion gallons of ethanol, sufficient to displace all gasoline consumed in the US.
The Energy Independence and Security Act of 2007 (EISA) tried to aggressively promote the development of cellulosic ethanol by setting new standards for renewable fuels (RFS 2). Under it the total volume of biofuels would be steadily increased to 36 billion gallons a year by 2022, which would correspond to 25% of the projected gasoline consumption. The larger fraction of blending would also require more flex-fuel vehicles that could operate with 15% or more of ethanol. To limit the potential conflict of food versus fuel and other negatives of corn-based ethanol, no more than 10 billion gallons of corn-based ethanol would qualify under RFS 2. Most of the rest would be made up by alternate biofuels, notably 16 billion gallons of cellulosic ethanol. Commercial production of cellulosic ethanol in 2007 was in its infancy. The dramatic increase in the production of ethanol, from essentially zero in 2208 to 16 billion gallons by 2022, as envisaged under EISA is illustrated in the graphic below from the Energy Information Administration.
The question before the EPA was whether to increase the mandate of ethanol as required by EISA, or to propose a cut to it in face of the reality. It issued a draft rule last November to cut the mandated volume of biofuels and opened it for public comment. The EPA has received more than 340,000 comments, and although it has made its final recommendation, as of this writing (Nov. 4, 2014) the final ruling has not been announced. Despite that, the mere announcement of possible cuts led to a drop in the price of corn, and many commentators hailed it as a win for Big Oil over Big Corn. However, the important issue is whether the nation wins—whether this action will help in achieving the original objectives of reducing dependence on imported oil and reducing CO2 emissions.
Given the very limited benefit of corn ethanol and the potential to do environmental harm and raise food prices, EPA had already capped its use to 10 billion gallons. The corn ethanol industry is lobbying hard against any cut back and also promoting the use of higher blends of ethanol. In the absence of cellulosic ethanol, that demand would be met by corn ethanol. Because the installed capacity of all the plants in the US already breaches the blend wall of 10%, higher blends will have to be permitted. The auto industry is opposed to the idea because higher percentages of ethanol in gasoline are not compatible with the fuel storage and delivery systems and could cause engine damage, and there are too few Flex-Fuel vehicles that can use the high ethanol blends.
The only reason for the EPA to stick to the RFS 2 mandates would be to keep the pressure on the advanced biofuels industry, but the installed capacity for cellulosic ethanol is so low that the law would end up penalizing gasoline vendors for non compliance with when there is no way that could comply. In any case, there is no justification to increase the use of corn ethanol.