Ethanol Expansion

What is Ethanol?

Ethanol is a fuel which is produced from plants, normally corn or sorghum, although in Brazil it is made from sugar cane. It is an alcohol-based fuel made by distilling plants that have been broken down into simple sugars. You may know it as grain alcohol.

Cellulosic ethanol is sometimes called biomass. This uses biologically engineered enzymes to break down any plant fiber for conversion into ethanol, making plants other than corn valuable for use as fuel.

Ethanol Expansion in the United States

The cost of ethanol in the United States is largely dependent on the rise and fall of corn prices. In fact, there are many aspects of ethanol expansion itself that will cause changes to the economy and the cost of living.

For example, most meat animals are fed a diet containing corn. As more ethanol is produced, more corn will be needed, and the cost will go up, according to the laws of supply and demand. Companies will buy more corn for alternative fuel use. As the feed costs to the farmers go up, so the prices of meat, eggs, and other products that rely on grain will follow. The cost of food will be in direct competition with the cost of fuel.

At first refiners were reluctant to pursue ethanol expansion because of historically low demand. In 2006 there were approximately one hundred ethanol refineries in production. Ethanol production increased forty-one percent in 2007, up from the year before. As Celluslosic ethanol becomes more available the supply and demand, caused by the rapid ethanol expansion of the past few years, should level off. With these figures, the numbers of refineries is expected to increase yearly.

The United States Energy Bill, which calls for biofuel production to increase to thirty-six billion gallons by the year 2022, will impact ethanol expansion for a long time. New markets are developing in the Southeastern United states which should increase sales of ethanol in the days to come.

The state of California and is currently using a blend of five percent ethanol. The state has the strictest air quality standards in the United States, currently, and is pushing for the blend to consist of almost eight percent ethanol. The California E85 Program encourages the ethanol expansion with the sheer aggressiveness of the program. As the Environmental Protection Agency requires cities to reduce their overall emissions, more cities are looking into ethanol as a fuel source.

The Future of Ethanol

Perhaps a closer look at Brazil will predict the potential future of ethanol in the United States:

• Ethanol accounts for about twenty percent of fuel used in transportation, with that percentage increasing.
• In Brazil, ethanol is now being used in small aircraft aviation.
• Brazil has begun to displace diesel fuel with vegetable oils from its huge soybean crop. Within the next fifteen years the country expects to substitute biodiesel for at least twenty percent of its conventional diesel.
• Seven out of ten cars sold in Brazil are flex fuel hybrids.

As the successful use of ethanol in Brazil continues, some experts predict that the demand for ethanol in the United States will continue to rise over the next two decades. Flex-fuel vehicles, and stricter regulations can only encourage this increase. Alternative fuels will be a permanent part of the future of the United States.