The president in the latest State of the Union Address spoke about America’s addiction to oil. I couldn’t agree more. A shift to an ethanol economy would drastically shift the energy balance in our favor.
I have heard the various arguments against ethanol. Most of them revolve around the net energy balance of manufacturing ethanol versus the amount of energy one gets from burning it. However, even the authors of some of these studies admit that if the same stipulations were applied to petroleum, it too would turn up as a loser on the energy balance. In fact even using such stringent guidelines, ethanol is a lot more energy efficient compared to petroleum. Yes it takes energy to make ethanol, but how far do you take the life cycle analysis? From the tractors used to plough the field, to the steel used to build the Walmart stores in the town the farmer lives in, everything contributes to the net energy balance.
The people arguing against ethanol on the energy balance basis, often forget one important point. It is important for a fuel to be energy efficient, but it must also be in a usable form. I can hand you a lump of coal and technically it has say, 5000 BTUs. But that is completely useless to you till I burn it in a power plant and give it to you in the form of electricity that you can use. Even if I lose 50% in the conversion, it is still worth it! That is the other side of the equation people often ignore.
Hydrogen as a fuel does have its obvious advantages, especially on the pollution front, but Hydrogen use today still is a distant dream. Compared to that, there are cars on the road today made by GM and Ford that will run any fuel from 85% Ethanol to 100% Gasoline. All Brazil had to do was mandate it. And even the cost of a retrofit is less than $150 per car. The oil companies have an excellent distribution system in place that can easily be converted to delivering ethanol to gas pumps. And once market forces take hold, competition will drive prices down.
Ethanol technology is not super high tech by any means. Investment dollars into the technology will skyrocket once ethanol becomes the established fuel, and the side benefits can be immense. Why couldn’t the tractors that plough the fields to grow the corn run on ethanol? Why couldn’t the trucks that deliver the grains to the fermentation plants run on it too? One can ferment almost any cellulose material to ethanol. And the material left after fermentation can be burned and used as fuel to power the plants that manufacture ethanol. In fact, this process has proven so efficient in Brazil that the plants burning the dregs produce enough steam and electricity that they sell to the national grid.
Ethanol can be used not just for automobiles but can also be used to fuel power plants which are currently dependent on natural gas and fuel oil. Imagine if we could free up all the gasoline we use for cars and the US Govt. no longer had to maintain a SPR. The psychological impact of that would be huge!.
Not only would this be good for America, but the developing countries too would benefit from this. Sure we will always have the need for petroleum, and not everything can use ethanol for fuel. Cold climate environments may dictate some mixture of gas + ethanol for cars. But the relative percentage of that would be small. To use something like that as an argument against ethanol is to throw away the baby with the bathwater. If we are no longer dependent on petroleum for fuel, supply vs demand equations would drive prices down for all items from Jet fuel to Petrochemicals and Pharmaceuticals. I work in the Chemical Industry and our #1 cost today is energy. We cannot but help transfer those costs to you, the customer. An ethanol economy would have a disruptive influence, but as we have often seen in stagnant markets, disruption is good.
The oil companies themselves are slowly but surely molding themselves into energy companies. They will adapt and survive. Like I said before, someone has to make the ethanol and deliver it to your doorstep. And I see no reason why the Exxon-Mobils of this world can’t be the people that do that. The only losers in this ethanol economy I see are the OPEC oil barons. But I am not going to shed any tears for them. They have had their run and made more than enough money. If ethanol takes off, hopefully we wont get into a price war and revert back to petroleum – just because OPEC decides to cut prices by 10 cents a gallon. If we push for an Ethanol economy, we can take control of our own destiny. The time for us to act is NOW.
I hope we get to see this dream fulfilled and soon.