Ethanol and Biodiesel: New Alternative Fuels for an Alternative Future

The adverse affects of human civilization on the environment is slowly becoming an epidemic that we cannot ignore. Al Gore's movie An Inconvenient Truth was an eye opener for many to a problem that has been worsening well before our life time. The good thing is that at least now there is less and less a case for those who want to ignore the problems we are facing.

Many countries around the world have chosen to take action, with a wide degree of change from them all. Automakers are being held more accountable, with demands being made to reduce pollution emitted from their vehicles, as well as a call for the production of cleaner fuels to go into those cars. The United States has made several steps towards a healthier environment, but unfortunately, there are a lot of influential companies that still have a lot of influence over lawmakers. Currently, gasoline makes up 17% of the energy consumed, and it will not change as long as companies have money to change politician's minds. Until politicians get their hands out of the pockets of automakers and oil companies, American's will be left behind in the world's environmental revolution.

Several feasible solutions have been proposed to lower pollution emitted by humans. The most important and influential of these has to do with automobiles. There are currently over 500 million passenger vehicles in the world, most of which are in the United States and Japan. This number is increasing daily, and when it is considered alongside with the fact that gas efficiency in these cars has steadily declined since the 1970's, there is no wonder that the United States, and most countries in the world, are dependent on oil to fuel their economies.

The aim of my research paper is to analyze what I think are the best alternative fuels, and ultimately choose the one that would most significantly help the environment, and lessen the United States dependency on foreign oil. It is important that the United States, perhaps the most influential country in the world, takes the appropriate steps to be responsible for its consumption. This includes creating types of energy that produce less pollution, lowering the consumption of energy, and passing legislation that regulates existing technologies.

I want to focus mainly on Biodiesel and Ethanol, because they are two emerging renewable fuels that have similar benefits, and are currently searching for a piece of the same market. Methanol, the other dominant alcohol fuel, is still produced and used, but not as much in a consumer sense. I will not ignore Methanol, as it is still available, but it is not as viable as ethanol, and could not compete with the gasoline industry like ethanol or biodiesel might.

Ethanol fuel is produced in two ways. One involves corn grain, and the other comes from cellulosic biomass. Most ethanol comes from corn grain, in a process called dry milling. Corn is ground into a fine powder called meal. Liquid is added to create a pasty mash, and it is slowly heated so that the starch becomes a liquid solution and bacteria are removed. Enzymes are added to break the starch into individual glucose molecules, where it is transferred to a fermentation tank, and yeast is added to convert the glucose into ethanol and carbon dioxide. The CO2 produced is collected and sold to other industries, such as making dry ice or carbonating beverages. The ethanol that is left still has solids from the corn mash, so it is distilled until it loses its solids and is 96% pure. The solids that are strained from the ethanol can be processed into protein rich products used in feeding livestock.

Ethanol is also made out of cellulosic biomass, which the leftover part of corn that is not used for livestock is feed, wheat straw, and certain grasses. The process is more expensive and less productive than corn grain, but it is less expensive and more abundant than livestock feed. Cellulosic biomass is more expensive because efficiently separating and breaking down the different polymers is a challenge the other process does not have to face. First, dirt is removed from the biomass, and it is shredded into small pieces. Heat, pressure, or acid treatments are used to break the biomass down into forms that are more easily broken down by enzymes, also known as hydrolysis. Enzymes are used to break down the biomass into several forms, two of which being glucose and xylose. Since biomass can come from several products, the enzymes used vary, and no one process works for all of them. After this, a series of biochemical reactions converts the glucose and xylose into ethanol.

Biodiesel is produced most commonly from a process called transesterification. There are other ways to produce biodiesel, but transesterification is preferred because it occurs at a low temperature and pressure, it yields a 98% conversion with minimal side reactions and reaction time, it is a direct conversion to biodiesel, and no exotic materials are needed for the conversion. The process itself is similar to the production of ethanol, and there are specific things that need to be removed so that it is not corrosive to engines. Producers need to make sure that all the glycerin, alcohol, and catalysts have been removed, as well as the fatty acids.

The production of both ethanol and biodiesel has increased significantly over the last five years. In 2005, the United States produced almost five billion gallons of ethanol, being produced from 101 ethanol refineries nationwide.

Currently, there are 42 ethanol refineries under construction, which will add an additional 2.9 billion gallons to the total production capacity of the United States. Demand for ethanol has increased with its production, especially during this past summer. In June 2006, demand for ethanol rose to a record high of 395,000 barrels per day (bpd). This was an increase of 46,000 bpd from May, and a 42% increase from June 2005. Ethanol production responded to this change in consumerism by stepping up its production. Production was increased to 318,000 barrels per day. It was an increase of 25,000 barrels from May, and was a rise of nearly 28% from June 2005. This could be in response to the increase of gasoline prices that regularly occurs in the summer months, and also to President Bush's challenge to the American public to make alternative fuels more readily available.

Biodiesel is one of the fastest growing alternative fuel markets in the United States, mostly because it is finally starting to get itself situated. One of the biggest challenges faced by the biodiesel industry was constructing a secure infrastructure. For example, bringing together biofuel and petroleum, one of the counterparts's necessary for production, is not always easy, and is often expensive. Currently, there are 46 existing plants, with another 27 facilities under construction. 75 million gallons was produced in 2005, and production is expected to increase by an estimated 32% a year. With the advent of federal policy intended to promote alternative fuel use, production is expected to reach 600 million gallons within the next few years. Biodiesel consumption has increased along with production. At the turn of the century, the United States increased consumption from .5 million gallons in 1999 to 2 million in 2000. Since then, consumption has increased steadily, finally reaching 30 million gallons in 2004.

There are vehicles made that are able to run on multiple types of fuel, designed to make alternative fuels more appealing, while still giving consumers the option to use unleaded gasoline. Commonly called Flexible Fuel Vehicles (FFV's), they accept mixtures of up to 85% Ethanol or 85% Methanol. Currently, Daimler-Chrysler, Ford, General Motors, Nissan, Mazda, Mercedes, Isuzu, and Mercury all make FFV versions of some models. A recent trend has been offering light truck FFV's that quench the American penchant for SUV's. These vehicles have onboard sensors that monitor the percentage of alcohol in the fuel, and adjust the engine to compensate. A readout on the dashboard informs the driver of this, and also if there are any problems with the engine. FFV's are used all over the United States, and have been steadily increasing in usage with the growing interest in alternative fuels.

Ethanol and biodiesel are popular alternative fuels because of their ability to be produced in mass quantities, and also because of their contributions to the environment. Right now, petroleum based fuels make up a significant portion of the pollution emitted by the United States. The US Department of Energy estimates that 82 percent of carbon monoxide, 43 percent of reactive organic gases, which are the precursors for what breaks down the ozone, and 57 percent of nitrogen oxides in the US are emitted from petroleum driven transportation. Ethanol adds oxygen to gasoline, which allows it to burn more completely, and reduces tailpipe emissions. Studies have shown that ethanol reduces carbon monoxide emissions by up to 30 percent, VOC emissions by 12 percent, and toxic emissions by up to 30 percent. Most importantly, it has been found to reduce particulate matter emissions by more than 25 percent. Particulate matter has been found to penetrate the human body and get into the lungs, where it can cause cancer and other health dangers.

Biodiesel is not only proven to be safer for the environment, it is the only alternative fuel to fully complete the emission testing and evaluation standards set by the Clean Air Act of 1990. Completely absent are the sulfur oxides and sulfates that are emitted by regular diesel. Smog producing elements are 50 percent less present in biodiesel than in regular diesel, and carbon monoxide is reduced by 48 percent. Particulate matter is lowered by 47 percent, and hydrocarbons are 67 percent less present in the emissions of biodiesel than in diesel.

Biodiesel and ethanol would not only make a good impact on the environment, it would also be economically sound for the United States to invest in these alternative fuels. There is a misconception that ethanol producers receive a subsidy, but it is actually a tax credit to oil companies to create an incentive for them to blend ethanol with their gasoline. The credit is 51 cents per gallon of ethanol used, or 5.1 cents per gallon of E10. This helps ethanol compete with the price of gasoline, and the tax credit is passed on to consumers through competitive pump prices. According to the Consumer Federation of America, a consumer purchasing E10 (90% gasoline/10% ethanol) could be saving as much as 8 cents per gallon when compared to 100 percent gasoline. Another popular argument for the increased production of ethanol is the benefits of building an ethanol plant.

An ethanol plant costs roughly 60 million dollars to build, and takes about a year. The construction of this plant will generate a one-time boost of 142 million dollars as spending circulates the economy. A plant spends more than 56 million a year on goods and services such as corn, paying for labor, and utilities. It expands the local economy base by 110.2 million, which produces an additional 19.6 million in household income. The opening of a plant creates up to 700 new jobs, and creates at least 1.2 million dollars in state and local tax revenue. Lastly, additional revenue will be given to farmers through the purchasing of their crops, increasing their revenue by 5 to 10 cents per bushel.

Similar effects would result from the increased use of biodiesel. There is a federal tax credit of one cent per percentage of biodiesel in a blend with gasoline for biodiesel producers. The US Department of Agriculture has found that an annual increase in production of 200 million gallons would create a boost in cash receipts of 5.2 billion dollars cumulatively by 2010. This would result in a 17 cent increase in the price of soybean bushels. In the future, the price of biodiesel is expected to decrease from today's $2.50 a gallon, to $1.46 in 2013.

All of these benefits from biodiesel and ethanol are coupled with the fact that the crops that would supply these industries would be grown within the United States. It will lessen our dependency on foreign oil, and also create a bigger market for our national farmers. It is important to diversify where we get our energy from, just as it is important to diversify our stock portfolio. As the old adage goes, it is never good to put all of your eggs in one basket.

Alcohol fuels have been used in America since before the Civil War, but only recently has it been researched as an alternative to fuel cars on a nation-wide level. Samuel Morey used alcohol fuel to power his prototype internal combustion engine, and it was the fuel of choice for Henry Ford's Model T.

During the Civil War, a $2.08 tax was set on alcohol fuels, which dramatically increased the price of ethanol. This made the fuel largely unpopular for domestic use until 1906 when the Free Alcohol Bill was passed by Teddy Roosevelt. This set ethanol prices at 14 cents per gallon, 8 cents less than gasoline, and was intended to create fuel independence for the United States, the intention of President Roosevelt, a staunch opponent of oil.

Ethyl alcohol was seen as the inevitable replacement for gasoline throughout most of the first half of the 1900's because of oil's finite supply, and usage was promoted around the world. By 1925, France, Germany, Brazil, and many other countries had mandatory blending laws that require gasoline retailers to mix gasoline with alcohol fuels, and a blend was used in every industrialized country besides the United States.

In the 1930's and 40's, the US market for ethanol fuel decreased as the ethanol production in the Midwest disintegrated. The production and consumption of alcohol fuels remained constant until the 1980's and 90's, when new oil wells were discovered, and gasoline prices dipped below that of ethanol. This brings us up to the recent past, where several important changes were made to the world's perspective, and spurred changes in how we fuel our planet.

In 1990, the United States passed the Clean Air Act (CAA), which was the first push towards lowering United States emissions, lessening dependency on foreign oil, and create more security for American farmers. All automakers were required to build cars that use alternative fuels or release less pollution through advanced engine design. It also required that their cars have under-the-hood systems and dashboard warning lights that monitor the pollution control devices. Besides regulating the production of vehicles, it also created a strict program for the inspection and maintenance of them. This enabled the government to track the emissions of cars and make sure that they did not fail in meeting emission standards after being purchased.

The CAA also had suggestions and new requirements that many metropolitan areas had to meet. Metropolitan areas are often the focus of these laws, because it is where there is the largest concentration of vehicles, and therefore pollution. The use of high-occupancy vehicle lanes was strongly suggested, and has been adopted in many major cities such as Atlanta, Los Angeles, and Miami. The gas used in major cities had to be redesigned by gasoline refiners, so that it contained less volatile organic compounds (VOC's). More specifically, this was intended to reduce the amount of benzene that was emitted. Chronic exposure to benzene can lead to cancer or aplastic anemia, a deadly blood disorder. Gasoline manufacturers were also told that their gasoline must contain detergents, which prevent build-up in engines, and keep them burning smooth and clean.

One of the most important parts of the Clean Air Act was its decision to phase out lead in all gasoline. This decision had a lot of support due to the Environmental Protection Agencies studies from the 1970's that linked blood-lead levels to the lead in gasoline. It was also shown that from 1976 to 1980, when lead in gasoline dropped 50 percent, lead levels in children's blood dropped 37 percent. This movement to unleaded gasoline was an important step in creating a healthier environment.

The CAA was the last major adjustment made to the United States energy habits until the Energy Policy Act of 2005 (EPA). Signed by President Bush on August 8, 2005, it went into effect in January 2006. The focus of this act was to create incentives for citizens that choose to use cleaner energies. A tax credit is offered to consumers and businesses that purchase fuel efficient hybrid-electric vehicles. Vehicle tax credits range from 250 to 3,400 dollars, based on the weight and fuel economy of the vehicle. People are also able to receive utility or state rebates and incentives for energy efficient homes and equipment.

Benefits were not limited to consumers; they were also extended to the producers of alternative fuels. Most notably, producers of biodiesel and ethanol receive a 10 cent per gallon tax credit for up to 15 million gallons produced. This was intended to stimulate the market for alternative fuels, and also the production of them.

The credit to vehicles created in the Energy Policy Act of 2005 is called the Alternative Fuel Vehicle Credit (AFVC).

In order to qualify, a person must meet four requirements. First, the car purchased must be capable of running only an alternate fuel. An alternative fuel means liquefied natural gas, liquefied petroleum gas, hydrogen and 85% methanol gas. Second, the vehicle must be new. This ensures that the vehicle meets the most recent pollution regulations, and is the most efficient available. The vehicle must be acquired for use or lease, not for resale. This is self explanatory. Lastly, the vehicle must be manufacture made. Some people have tried to convert their cars, with moderate success. Manufacture made cars have all passed tests, and are proven to meet Energy Policy Act requirements.

The credit received after meeting these requirements is 50% of vehicle cost and an extra 30% if the vehicle has a Clean Air Certificate, or meets California's emissions standards for vehicles. I think this is a really good incentive for consumers, one that people will take advantage of. From 2004 to 2005, gasoline prices rose from $36.98 per barrel ($1.85/gallon) to $50.23 per barrel ($2.27/gallon). This trend has to increase because gasoline is a finite product, and global oil demand has increased dramatically with the emergence of economies like China. Eventually gasoline will reach a point

where consumers will have had enough. They will then start to buy hybrid cars, which will almost surely result in the dramatic increase in the price of said hybrid cars. The current market for hybrid cars is a buyers market because companies need to bend to the low market demand for alternative fuel cars. I don't think right now is perhaps the best time to invest in an alternative fuel car, but it is in the foreseeable future.

I think that the use of both biodiesel and ethanol are great ways to wean ourselves off of our dependency of foreign oil. Since biodiesel is a replacement for regular diesel, and ethanol is a good alternative for gasoline, or at least in a mixture, the use of both would encompass the entire automotive industry. Because the gasoline industry has cemented itself in the minds of consumers as the most viable fuel, it will take a lot for a new fuel to take a sizeable chunk of the market. This is another reason why the United States should not look towards a single alternative fuel. Also, the corn crop which would be needed for the production of ethanol is already used for livestock feed, and to a lesser extent human consumption. If we were to depend solely on ethanol as a renewable fuel, it would cut into our current uses. If we use a little bit of everything, soybeans, corn, cellulosic mass, solar energy, and wind energy, then no single industry has to take an economic hit.