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$170M for H2 Storage

What About Ethanol?

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Ethanol and biodiesel are currently the two primary biofuels. From the DOE Alternative Fuel Data Center:

Ethanol is an alcohol-based alternative fuel produced by fermenting and distilling starch crops that have been converted into simple sugars. Feedstocks for this fuel include corn, barley, and wheat. Ethanol is most commonly used to increase octane and improve the emissions quality of gasoline.

Ethanol can be blended with gasoline to create E85, a blend of 85% ethanol and 15% gasoline. Vehicles that run on E85 are called flexible fuel vehicles (FFVs). Looking into the future, the ethanol industry envisions a time when ethanol may be used as a fuel to produce hydrogen for fuel cell vehicle applications.

So. A fuel that we can “grow”, and that already can be used in production cars and trucks. GM, Ford, DaimlerChrysler, Isuzu and Mazda, for example, offer a range of FFVs, including some of the larger SUVs. GM has been on a bit of an ethanol push for several years. Here’s a representative talk. In March, GM announced that it would produce additional ethanol vehicles for the 2005 lineup, and is working with the National Ethanol Vehicle Coalition (NEVC) on a marketing campaign for E85.

What’s the problem?

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First, ethanol’s properties as a fuel. We need to get into a little bit of chemistry. Gasoline (and diesel) consists of multiple types of molecules consisting of hydrogen and carbon atoms in chains of different lengths. (Part of creating different fuels is the blending of these different types together.) For example, the structure of one gasoline molecule, Octane, is C8H18. When these hydrocarbon molecules burn (with oxygen), the result is heat and exhaust.

Unlike gasoline, ethanol contains oxygen in its structure. That oxygen doesn’t contribute directly to the net energy in the reaction -- but it does contribute to a more efficient burn. This structure allows ethanol to be used to oxygenate gas -- to put oxygen into the fuel to assist in the burn -- a primary use today. Because ethanol is not as carbon and hydrogen rich as petroleum-based fuels, it has a lower energy content for a given volume. Using ethanol as a fuel or just as an additive reduces fuel efficiency a bit simply because of the chemistry. Engine technology can compensate for some of that, and the fact that ethanol is renewable and free of the same GHG burden as gasoline makes it very attractive. So, no problem there. As a fuel, or even as an additive, ethanol is a fine alternative.

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Reflecting that, E85 vehicles have grown in use more rapidly than any other alternative platform, and in absolute numbers are second only to Compressed Natural Gas (CNG). (Click on chart at right to enlarge.) (US DOE EIA)

It comes to production and cost. With a capacity to produce some 3.2 billion gallons of ethanol per year, the US in 2003 produced 2.81 billion. Ethanol production has been on a steep growth curve. But ethanol -- so far, at least -- is more costly to produce than gasoline. Ethanol (and by extension, agriculture) receives a hefty subsidy to allow it to be price competitive with gasoline. (Again, given what’s happening with oil, the dynamics of that may shift fairly soon.)

In the US, the primary feedstock for ethanol is corn. Current levels of ethanol production require approximately 10% of the corn crop. (900 million bushels of a 9 billion bushel yield.) But the US consumes some 136 billion gallons of gasoline each year. In other words, to match even 50% of that demand would require increasing ethanol production by a factor of 24 -- or basically taking 2.4 times the entire current corn crop.

A major promising development is the emergence of bioethanol -- using biotechnology to develop new enzymes that make ethanol efficiently from just about any plant material or waste. (See the 22 Apr post on Iogen.) Robust biotech solutions for producing bioethanol could address many of the supply issues.

The other factor to consider is fueling. There is not a strong ethanol fueling infrastructure in place. Ethanol pipelines from the Midwest (currently the primary fuel source -- where the corn grows) don’t exist. (Stepping into that particular gap are the rail companies. CTX earlier this year touted its “virtual” train-based ethanol pipeline to the Northeast. Union Pacific is tackling California.)

Judicious funding can help this process along. Customer demand and entrepreneurial zeal can make it a real factor.

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