• Jun 22, 2010
Just a couple of years ago American-made corn ethanol was vilified in the media. It was blamed for soaring food prices, and for causing food riots in Mexico. The UN even accused the U.S. of depriving the world of food.
What a difference a couple of years makes!

Today food production is soaring, especially corn. In fact, it's up so much that farmers now worry about a price crash. And all this happened despite the fact that ethanol production is booming.

Back in 2007 when criticism of ethanol started to reach a fever pitch, the U.S. produced 5.5 billion gallons of ethanol at 110 refineries. This year the U.S. is on track to produce 13 billion gallons from 187 refineries located in 26 states. In other words, ethanol production more than doubled at the same time that food prices declined. Too bad the media doesn't follow up on these things.







John McElroy is host of the TV program "Autoline Detroit" and daily web video "Autoline Daily". Every week he brings his unique insights as a Detroit insider to Autoblog readers.



Because there is so much ethanol available in the market today, prices have dropped dramatically. Throughout the Midwest you can buy E-85 at anywhere from a $1.87 to $2.40 a gallon, compared to roughly $2.70 to $2.80 for regular gasoline. That puts it in the range where it makes economic sense to buy E-85, despite the drop-off in fuel economy.

In fact there is so much ethanol available that producers are clamoring to raise the blend rate from E-10 to E-15. There simply are not enough stations selling E-85, so they want all cars to use E-15.

Today it's almost impossible to buy pure gasoline in the United States.
Today it's almost impossible to buy pure gasoline in the United States. Almost all of it is blended with 10 of the gasoline the US consumes each year. Boosting the blend rate to E-15 would displace that much more.

Moreover, California has enacted a requirement for low-carbon fuel, and the only way anyone knows how to do that right now on a large-scale, affordable basis is by blending more ethanol with gasoline.

Unexpectedly, GM, Ford and Chrysler are throwing up obstacles when it comes to raising the blend rate. They claim more studies are needed to see if it's safe to use E-15 in their engines, even though the industry has decades of experience using E-22 in Brazil.

Other engine manufacturers that run the gamut from lawnmowers to snowblowers to motorboats are also objecting to E-15, saying that ethanol lacks the lubricity of gasoline and that they'll start burning valves. But we heard the exact same argument when lead was banned from gasoline in the late1970's and we made that transition without major calamity.

The real reason the Detroit Three are opposed to E-15 is that they currently get CAFE credits for building flex-fuel vehicles that can run on E-85. If the blend rate rises to E-15, the availability of E-85 would likely go down, and they would likely lose their flex-fuel credits after 2015.

But they're probably fighting an uphill battle. At this snapshot in time it looks likely that the EPA will boost the blend rate to E-15 sometime in the next year.

The numbers are just too compelling.
The numbers are just too compelling. Despite all the talk about hybrids and electrics and CAFE improvements, so far nothing has come close to displacing oil as ethanol has. And we're just getting going. There are 15 more corn-ethanol refineries being built right now, and seven more plants under construction that will make cellulosic ethanol from other biomass including switch grass and agricultural and municipal waste.

Of course none of this has convinced the critics. They continue to rail against ethanol saying it's not the answer. And they're right. It's not the answer. The Department of Agriculture estimates that the United States could derive 25% of its fuel needs from biomass by 2025. Clearly that leaves the country far short of the energy it needs.

But as I like to point out, the U.S. imports roughly 25% of its oil from OPEC. That means ethanol offers us the fastest opportunity to tell the chaps at the cartel that we no longer need them.


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  • 24 Comments
      • 4 Years Ago
      I have been running 20% ethanol and slightly higher than that even, my cars are not flex, and have bnever had a problem. Any car that was built to handle 10% can easily handle 20%, even 30%. It is an oxygenate, thats it, and all ethanol blended for fuel contains anti corrosives, making them less corrosive than pure gasoline. When are you people gonna stop believing the fear mongering oil companies and FOOD INC who have the most to lose. They fear monger to the extreme and spew false nonsense.
      • 4 Years Ago
      Ethanol is still a stupid idea. Taxpayers pay huge subsidies to the corn producers, and then on top of that, there's the basic physics of conservation of energy. You spend more energy processing corn than you get out of it. What a load of crap.
        • 4 Years Ago
        Agree eleventy billion percent.
        • 4 Years Ago
        Eliminate all subsidies to the gas/ oil industry and see what happens to the price of gas.
        • 4 Years Ago
        Actually, the price is low due to a surplus of ethanol. There's simply more ethanol than is needed at the moment. Notice gas prices are also down.
        • 4 Years Ago
        You are partially correct. Corn-Based Ethanol is not the best idea. Thankfully, Corn isn't the only way to make Ethanol.

        I agree though on the subsidies, a lot was mentioned here about how the price is so low for Ethanol currently, but no mention was made that the price is only that low due to subsidies.

        Without those subsidies, E85 cannot compete with gasoline price-wise which it needs to do since it lowers the fuel economy due to lower energy content.

        As technology progresses though, we will replace more of the Corn-based Ethanol with other sources and your concerns will largely fall away.
      • 4 Years Ago
      Right, we will no longer need oil because we will have ethanol.
      Just like we no longer need power plants because we have rechargeable batteries.
        • 4 Years Ago
        @montoym You're not getting my point. Ethanol is not displacing any oil, we're spending more oil to make the ethanol.
        Like a battery, ethanol is an energy carrier, not a source, we put more energy into it than we can ever get out.
        • 4 Years Ago
        Where does the story mention replacing oil entirely?

        I only see the mention of replacing enough of it with Ethanol to displace the amount we receive from OPEC(most of our oil is not from OPEC, only 25% according to the story).

        We will always need oil, it's far too ingrained in our society in so many different items. But, to replace a large portion of that oil with Ethanol can dramatically change the political landscape in addition to being much better for the environment since Ethanol burns much cleaner.

      • 4 Years Ago
      So true. It makes me want to cry.

      Monsanto should not be put in charge of America's future energy policy.

      Corporations own America and we do what's best for them, not the other way around.
      • 4 Years Ago
      What ever happened to switchgrass or sugar cane ethanol, both of which are supposed to be more productive than corn? They might even become more than an energy wash, as corn ethanol is. Remember that this stuff can't be piped like gasoline because it's both corrosive and hygroscopic, and it's 30% less efficient, reducing fuel mileage, and must be trucked to refineries, then more often to dealers.
      • 4 Years Ago
      The writer dismisses arguments from engine producers quite quickly. The major concerns from both automakers and engine makers as a whole are LEGACY LEGACY and LEGACY.
      If the EPA can make a cohesive and self-explanatory system to keep end users from putting E15+ into engines not designed for it then the transition will go much more smoothly. Simple as that.

      P.S. the tests aren't bogus, I've seen legacy chainsaws running E15 idle high enough to release their clutches on their own...BAD
      • 4 Years Ago
      There's a glut because this has been an amazingly good year to grow grain and corn. The weather has been perfect. If the weather sucks next year, now we've got mandated E15, and no more corn for eating. Then the tortilla riots will return.

      How about we stop subsidizing corn ethanol, and then we'll see how it competes?
        • 4 Years Ago
        Good point,
        McElroy forgot to mention the furor a few years ago started with spring flooding that reduced the crops. The subsidies should be available only for food crop growers for such off season. Additionally, incentives for building ethanol production facilities make sense, but if corn ethanol can't stand on it's own in the marketplace, we need to move on to other ethanol sources.

        So McElroy, do we still force the coasts to ship ethanol from the Midwest or impose tariffs on imported ethanol, forcing non-Midwesterners to pay more for their mandated ethanol?

      • 4 Years Ago
      I think E85 should be available everywhere. I live near Ottawa, Ontario and unfortunately there's only 1 station that sells E85. And it's at the same price as their regular fuel. It should be about 30% less expensive.

      But my next car will definitely be a FFV and I'll fill up with E85. Why is this so important?

      Just ask the people living near the Gulf of Mexico, or the 1000's affected by soldiers getting killed trying to defend the oil in the Middle East. We must replace this horrible source of pollution with clean renewable energy. Why is it so hard to understand for so many people?
        • 4 Years Ago
        SJ:
        It's scary to think that there's a lot of people who think like you do.
      • 4 Years Ago
      The idea that a molecule of CO2 is labeled "from fossil fuel" and another, is labeled "from Ethanol" is just plain STUPID. It is only believable to denizens of Incompetence Central, and gullible Green clods..

      CO2 is is CO2 . The molecules are all indistinguishable, and equally innocuous.

      The only good that comes from the subsidized Ethanol experiment is that it proves that we could supply all our transportation needs with synthetically manufactured carbon based fuels when we have converted to EREVS and PHEVs. Something we won't have to do for a few hundred years, but nevertheless we will do in a few decades,merely to break the OPEC cartel.
      • 4 Years Ago
      I'm Brazilian and the cars runs on E-25 gasoline here but we have some problems when travel by car to the neighbour countries where only pure gasoline is available.

      And the MPG drops a few with this blend too. E-25 is only available here because the lobby of the local ethanol producers. There's no ecological aspect on this choise. At least here in Brazil.

      • 4 Years Ago
      Why don't you mention the subsidization of ethanol? Great detail here about how ethanol could help us show the oil cartel who is boss, but you leave out the most important part, and right after discussing the dropping cost. You miss the point without discussing the fact that ethanol is on the dole...
      • 4 Years Ago

      Let the politicians try and get rid of the subsidies and their prospects for reeelection can be kissed goodbye.Doubtful that many politicians will take that risk.Same with raising the Gasoline tax.
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