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The great ethanol debate

Last updated: January 2011

When it comes to ethanol (aka E85), there's no shortage of disagreement over its viability as a fuel source.

The federal government has been promoting ethanol for decades as a renewable, homegrown alternative to gasoline. In recent years, this alternative fuel has resonated with consumers who are concerned with America's dependence on foreign oil as well as pump-price volatility. But is Ethanol the answer?

Michael Pacheco, a spokesman for the National Renewable Energy Laboratory in Golden, Colo., explains: "The big challenge is that we are going to reach a peak in world oil production," he says. "We need to start working toward replacement fuels 20 years before that peak."

The near-term advantages of ethanol look promising to government scientists as we draw closer to that peak, because it can be produced in large quantities, and it requires fewer technological breakthroughs and less infrastructure development than is needed to support electric vehicles and fuel cell vehicles.

Yet university scientists for decades have raised questions about ethanol's viability as a fuel source for three reasons:

  • They argue that it is unethical to produce fuel from a food crop, especially if it drives up food prices. Most of the ethanol in the United States is made from corn.
  • Ethanol contains less energy than gasoline, and it takes a lot of energy to produce.
  • A variety of conflicting studies have shown that producing ethanol may—or may not—increase emissions of carbon-dioxide, a gas linked to global warming.

Putting E85 to the test

To better judge ethanol's strengths and weaknesses, we decided to buy a flex-fuel vehicle (FFV) and put E85 to the test. E85 is an ethanol mixture promoted as an alternative to gasoline.

We put our 2007 Chevrolet Tahoe FFV through our full series of fuel-economy and acceleration tests while running on each fuel. When running on E85 there was no significant change in acceleration. Fuel economy, however, dropped across the board. In highway driving, gas mileage decreased from 21 to 15 mpg; in city driving, it dropped from 9 to 7 mpg. You could expect a similar decrease in gas mileage in any current FFV.

We also took our Tahoe to a state-certified emissions-test facility near our test track in Connecticut and had a standard emissions test performed. We found a significant decrease in smog-forming oxides of nitrogen when using E85. However, ethanol emits acetaldehyde, which the EPA lists as a probable carcinogen and something that standard emissions-testing equipment is not designed to measure. But that might be a relatively minor evil, however.

"Acetaldehyde is bad," says James Cannon, president of Energy Futures, an alternative-transportation publication, "but not nearly as bad as some of the emissions from gasoline."

Before we could do any of that though, we had to fill up our Tahoe with E85, which was no easy task. We found it's especially difficult to get E85 in New England, near our test track. After trying all the local channels, we ended up having to mix it ourselves.

Yet, for some consumers, such as those who live in the Midwest, near where corn is grown and ethanol is produced, the fuel does offer perhaps the only readily available alternative to petroleum today.

So how did we get to the point where the government is subsidizing a fuel that gets worse fuel economy and is difficult to buy?

The ethanol story is both complex and controversial. We'll dig more deeply into the pros and cons of ethanol, learn more about how ethanol works, the government's support for it and its unintended consequences, ethanol's environmental impact, and issues with ethanol for consumers, and the future of ethanol.

What is ethanol, and how is it used?

Ethanol is a form of alcohol (think whiskey) that is combustible and can power engines easily. In the United States, it is made in the primarily from corn, but also from a small amount of sugarcane in Louisiana. New types of biorefineries are also being built to create ethanol from non-food material such as wood chips, switch grass and even municipal waste, although these technologies are not yet yielding fuel on a large scale. Overseas, ethanol is more often produced from sugar and wood chips.

The idea of running cars on ethanol is not new. Henry Ford designed the first Model T to run on ethanol so that farmers could produce their own fuel.

Ethanol alcohol for cars is denatured, blended with about 1 percent gasoline to make it non-potable.

In the Unites States, ethanol is sold primarily in two forms. Today, 70 percent of gasoline is blended with ethanol as in a 10/90 ethanol/gasoline mixture called E10, according to the Energy Information Agency. Ethanol in E10 serves as an oxygenate, which helps gasoline burn cleaner to reduce smog. E10 can be used in any new car.

Alternative fuel advocates have promoted a higher blend of ethanol, E85 (85 percent ethanol and 15 percent gasoline) for use in flex-fuel vehicles—models that can operate on gasoline or E85, or any blend in between. In E85, gasoline is used to provide enough starting power for cars in cold weather. (A list of FFVs is available from Growth Energy, a group promoting ethanol use.)

More recently, ethanol advocates have been promoting intermediate blends dispensed with special "blender pumps." Auto engineers say these intermediate blends can still be used only in FFVs, and that expanding their use will require all cars to be made flex-fuel compatible. Using intermediate blends in non-FFVs can cause increased emissions and catalytic converter wear, as well as premature deterioration of fuel-system components, because ethanol is corrosive. FFVs use special fuel tanks, lines, and pumps designed to be more corrosion resistant. Their emissions systems are also specially designed to recognize and compensate for higher blends of ethanol. Making cars E85-compatible costs automakers about $200 per car, according to some estimates. Therefore, engineering a car to run on E85 costs much less than building it to operate on other alternative fuels, such as diesel.

Conventional vehicles could technically be converted to run on E85, but it would be prohibitively expensive once the car leaves the factory, and it may violate emissions-control laws in some states.

Ethanol's lower fuel economy results from its lower energy content compared to gasoline. For example, E85 contains 75,670 British thermal units of energy per gallon instead of 115,400 for regular unleaded gasoline, according to the National Highway Traffic Safety Administration. So you have to burn more fuel to generate the same amount of energy. In addition, FFV engines are designed to run most efficiently on gasoline. Some engineers we interviewed say E85 fuel economy could approach that of gasoline if manufacturers optimized engines for that fuel, however.

Government support for ethanol

For decades, the federal government has promoted ethanol as a renewable, homegrown alternative to gasoline in three distinct ways. Proponents see this support as necessary to get the alternative fuel into widespread availability and usage.

The first effort to support ethanol usage is a 51-cent-per-gallon tax credit to "blenders," the companies who blend ethanol into gasoline. This tax credit is intended to raise the price of ethanol for ethanol producers and corn farmers to encourage production, and to lower the price of ethanol products for consumers. It is strongly supported by farm lobbyists.

Despite the tax credit, however, E85 costs about 70 cents a gallon more than gasoline on an energy equivalent basis on average, according to the Department of Energy.

Second, the government provides significant fuel economy credits to automakers who build flex-fuel vehicles that can run on E85.

The fuel economy credit was passed as part of the Alternative Motor Fuels Act of 1988 and counts toward a manufacturer's Corporate Average Fuel Economy (CAFE) standard, which is set by NHTSA. Under the regulations, the average fuel economy for an automaker's entire fleet of vehicles must meet a minimum miles-per-gallon figure: 30.2 for cars and 24.1 for light trucks in 2011. So the more large vehicles a manufacturer builds with gas mileage below that minimum, the more they have to be offset either by smaller vehicles that get better fuel economy or by fuel-economy credits, such as the one for FFVs. This is quite literally a loophole big enough to drive a truck through for automakers that produce many gas-guzzling pickups and SUVs. The FFV credit was intended to provide an incentive to get E85 vehicles on the road. In determining the credit, the government assumes that an FFV will run on E85 half the time and on gasoline the other half. For CAFE purposes, the E85 half is calculated as using only the 15 percent of the fuel that is gasoline. So the government rates FFVs at about 1.67 times the fuel economy that they actually get on gasoline. So our 2008 Chevrolet Tahoe, which had a CAFE rating of 16 mpg on its window sticker, was credited under CAFE rules with a rating of 27 mpg, because it can run on E85. This applies to the Tahoe we bought in New England even though we couldn't find any E85 to use in it near us. The maximum that an automaker's fleet average can be raised because of FFV credits is 1.2 mpg, and the credit is scheduled to be phased out by 2018.

Of the 13 billion gallons of ethanol expected to be produced in 2010 and 2011, less than 2 percent, or 260 million gallons, will be blended into E85. Because our tests show that E85 provides 27 percent lower fuel economy, those 260 million gallons are able to replace only a little more than 214 million gallons of gasoline—a tiny fraction of the 170 billion gallons consumed on American roads every year.

While the credits have put millions of FFVs on the road since the late 1990s, most have been large SUVs, pickups, and sedans that get relatively poor gas mileage and don't do well in Consumer Reports testing.

In the end, these FFV credits have indirectly allowed more large, gas-guzzling vehicles to be sold. As a result, these credits have increased annual U.S. gasoline consumption by about 1 percent, or 1.2 billion gallons, according to a 2005 study by the Union of Concerned Scientists (UCS), a nonprofit organization that focuses on safety and the environment.

The third government initiative to promote ethanol is a mandate Congress passed as part of the Energy Independence and Security Act of 2007 requiring refiners to blend up to 36 billion gallons of ethanol into gasoline by 2022.

This mandate, however, is bumping up against physical and economic limits.

Increasing ethanol penetration much beyond current production will require either expanded sales and distribution of E85, or greater concentrations of ethanol in base gasoline. Automakers say this would essentially require all cars to be flex-fuel vehicles.

From an alternative-energy perspective, it doesn't matter in what proportions ethanol is blended. Whether mixed in E85 or E10, a given amount of ethanol still goes just as far in reducing demand for gasoline.

Ethanol advocates' latest gambit is to increase the percentage of ethanol blended into gas for regular cars from 10 percent to 15 percent. In March 2009, an industry trade group, Growth Energy, petitioned the EPA to allow E15 to be used in regular cars. And Underwriters Laboratories certified regular gas pumps to dispense ethanol blends up to 15 percent.

Furthermore, energy experts at Argonne National Laboratory say that corn production can't be expanded enough to produce more than about 15 billion gallons of ethanol. In 2009, 21 percent of the corn crop was used to produce ethanol, according to the National Corn Growers Association (NCGA). So to meet the 36-billion-gallon mandate will require new sources of ethanol. The government also says corn is not a good long-term fuel source because it diverts corn from the food supply.

The future of ethanol

Most experts don't see the future of the ethanol industry taking root in America's cornfields. A more promising long-term solution is cellulosic ethanol, which can be made from a variety of other sources such as corn stover (leaves, stalks, and other leftover parts), rye straw, wood pulp, and possibly switchgrass (commonly used for hay). In Brazil, where every new car runs on at least 20-percent ethanol and many run on pure ethanol, the fuel is made from sugarcane.

"If this country is going to go big into ethanol, we need to tap into cellulosic ethanol," says UCS Research Director of Clean Vehicles David Friedman, "because it's cleaner and requires less fossil fuels than corn [to produce]."

A 2005 study conducted by the U.S. Department of Agriculture and Oak Ridge National Laboratory estimates that by 2030, ethanol from corn and cellulose could replace 30 percent of U.S. oil consumption—about the same as the United States currently imports from OPEC nations. Called the Billion Ton Study, it assumes that 1 billion tons of organic material could be used, with no loss of corn for food or feed, from resources such as forest waste organic residue, and energy crops such as switchgrass.

Companies have developed a number of processes for creating cellulosic ethanol. A few technology companies are working on new chemical processes that could create ethanol from waste streams such as leftover construction materials and even municipal garbage. So far these technologies have only been demonstrated on a small scale, and it will take several years before we know whether they are viable. Today about two dozen cellulosic ethanol plants are under development in the United States.

The big ethanol picture

From a broader perspective, several studies have tried to clarify ethanol's value as an energy source and there remains some debate on the issue.

David Pimentel, a Cornell University professor of ecology and agricultural sciences, who served on a government committee that studied ethanol in the 1980s, says it takes almost 30 percent more energy to grow corn and turn it into ethanol than the ethanol contains.

However, Michael Wang, an Argonne National Laboratories scientist who has contributed to several government studies, estimates that ethanol produces 35 percent more energy than its production process consumes.

Most recent studies have shown a positive energy balance for ethanol of between 23 and 40 percent.

Another debate centers on ethanol's greenhouse gas emissions. Proponents say that ethanol use doesn't add to the world's balance of greenhouse gases because it simply puts back the same carbon dioxide that the source plants absorbed while growing. Some recent studies have disputed that assumption, however, saying that growing more corn in the United States causes farmers in other countries to clear more land to grow crops displaced by corn here. And in any case, harvesting crops such as switchgrass for ethanol that wouldn't be harvested otherwise releases extra carbon into the atmosphere.

What should consumers do?

Currently, there's no financial advantage to consumers in buying an FFV. As of January 2010, E85 cost $2.38 a gallon on a nationwide average basis, compared with $2.65 a gallon for regular gasoline. Considering the fuel's worse fuel economy, however, it would cost consumers the equivalent of $3.36 a gallon to drive on E85 rather than gasoline, according to the federal Alternative Fuels Price Report.

Even when gas prices rise, E85 doesn't become more financially appealing, says Craig Pirrong, director of the University of Houston's Global Energy Management Institute. Because it serves as a substitute for gasoline, "if the price of oil goes up, you would expect the price of ethanol to go up as well," he says.

On the other hand, there's no inherent downside to buying FFVs, because they can run on gasoline and don't carry the hefty price premiums of a hybrid. Your choice, however, is limited mostly to large SUVs, pickups, and sedans that get relatively poor gas mileage. So far only about 3,000 gas stations (out of 176,000 nationwide) sell E85 to the public, although that number is growing. So finding an E85 pump near you can be a challenge. Most of these stations are in the upper Midwest, relatively close to where corn is grown and most ethanol is produced.

Even using the most optimistic estimates, ethanol on its own will never be able to provide Americans with energy independence. Alternative energy experts say it will take a host of alternatives to meet the United States' energy needs beyond oil.

Even so, ethanol proponents say that it should still be developed as a long-term hedge against oil shortages, because petroleum is a finite and dwindling resource that has its own environmental problems. Against that backdrop, ethanol, as one of an arsenal of oil alternatives, seems to have fewer problems than some other options.

Test results: E85 vs. gasoline

This chart shows how our 2007 Chevrolet Tahoe performed while running on E85 and gasoline in three fuel-economy tests and overall, in four acceleration tests, and in three emissions tests for gasoline vehicles.

  E85 GASOLINE*
Fuel economy, mpg
City 7 9
Highway 15 21
150-mile trip 13 18
Overall 10 14
Acceleration
0-30 mph, sec. 3.4 3.5
0-60 mph, sec. 8.9 9.1
45-65 mph, sec. 5.7 5.8
Quarter-mile, sec./mph 16.8/84.6 16.9/84.5
Emissions, parts per million
Nitrogen oxide 1 9
Hydrocarbons 1 1
Carbon monoxide 0 0

 

* Clarification: * Blended with 10 percent ethanol.

The great E85 fuel hunt

The scarcity of E85 fuel in the Northeast made testing our Chevrolet Tahoe more of a challenge than we had first anticipated. We quickly found there are no commercial stations in Connecticut, where our auto-test center is located, where we could fill up with E85. The only E85 pumps we could locate were owned by the state of Connecticut, and the fuel wasn't for sale.

After a call to a representative of the state's alternative-fuels program, however, we found that the state buys its ethanol from a supplier in Alabama. So we contacted the supplier and arranged to have 220 gallons of ethanol shipped to us from South Carolina by truck in four 55-gallon drums.

But that got us only the pure denatured ethanol. To use it in the Tahoe, we had to blend it with gasoline in an 85/15 percent ratio to create E85. For that, we again turned to the state and arranged to have a fuel expert come to our track and help us blend the fuel by hand.

The whole process took the better part of a month to complete and vividly illustrated why advertising flex-fuel vehicles in most of the country is currently an empty promise.

   

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