General: alternative fuels

Alternative systems for powering cars have increasingly received attention in the drive to decrease the United States' dependence on foreign countries for fossil fuels (i.e. oil). In general, the following alternatives are currently being pursued:

1. Ethanol
1. Corn-based
   
2. Sugarcane based
3. Cellulosic (produced from any form of bio-mass)
   
2. Diesel
   
1. Oil based
2. Bio-diesel (generally soy-based)
   
3. Hydrogen
4. Pure-Electrics
   
5. Hybrids

Ethanol, in the United states, is generally made using corn. However, making ethanol from corn is very inefficient, possibly requiring more energy to create than it yields when its used. As a result, corn based ethanol is far more expensive than most other forms of ethanol - especially ethanol made from sugar cane. This is evidenced by the fact that E85 costs almost as much as regular gas, while E100 generally costs a third the price of regular case in Brazil - which makes its ethanol using sugarcane. Furthermore, corn based ethanol requires approximately 3 to 4 gallons of water to produce a single gallon of ethanol. Cellulosic ethanol, though not currently commercially viable, has a ratio of water used to ethanol yielded closer to 1 to 1.

A big problem with ethanol, regardless of the form, is that it can't be transported and stored using existing oil distribution infrastructure because of its much high corrosive water content. As a result, gas stations need to install special tanks to store it, and transportation costs make it prohibitively expensive to transport ethanol far from where its created. As a result, E85 is hard to find outside of the mid-west - where corn is abundant. I personally haven't seen it pumped since I moved from Texas.

Ethanol's energy content is also less than regular gas's by roughly 30%. As a result, flex-fuel vehicles get roughly 30% fewer mpg on Ethanol than they do on regular fuel. Given E85, as sold in the US, is about the same price as gas, consumers are deciding against their own interests when they purchase E85.

The above raises the following questions: why is corn based ethanol the primary form found in the US? Why is ethanol even produced? Why do car producers produce cars that use E85? And, why do consumer purchase E85?

The United States doesn't have a large supply of sugarcane because of its climate, and foreign produced ethanol is subject to a large $0.53 per gallon tariff. Locally generated ethanol though is subject to a ~ .50 subsidy for each gallon produced. Also: the US Agriculturally policy effectively subsidizes corn production. As a result of currently regulations, corn based ethanol is economically viable. Presumably, if regulations and tariffs were removed from the picture, the US wouldn't produce any corn based ethanol and would instead import sugarcane based ethanol from brazil (which would still be more expensive than $1 a gallon because of transportation costs). Thus, the justification for the existing regulatory structure is that its necessary to encourage local production.

As to why consumers purchase E85 when its available and when they're car supports it -- they apparently usually don't. Though, those that do are often ignorant of the decreased fuel efficiency and base their decision on the slightly lower price tag per gallon that E85 sports. So, from what I've read, have patriotic motivations.

Cellulosic Ethanol, on the other hand addresses many of the current problems with corn-based ethanol. Coskata claims that in several years it will be able to produce ethanol at a cost of $1 a gallon. instead of a food crop like corn being used, any biomass should be usable - meaning that production plants could profitably be operated near points of sales - thus reducing transportation costs.

Related Links:

1. http://www.edmunds.com/advice/alternativefuels/articles/120863/article.html
2. http://www.nytimes.com/2006/05/14/automobiles/14GREEN.web.html?scp=5&sq=e85&st=nyt
3. http://www.nytimes.com/2007/12/15/business/15ethanol.html?scp=1&sq=e10&st=nyt
4. http://wheels.blogs.nytimes.com/2007/12/08/35-mpg-until-you-read-the-fine-print/?scp=1-b&sq=e10%20lower%20fuel%20efficiency&st=nyt
5. http://www.nytimes.com/2007/09/19/opinion/19wed1.html?scp=5&sq=ethanol%20subsidies&st=nyt
6. http://wheels.blogs.nytimes.com/2008/01/14/gm-grabs-for-some-alcohol/?scp=1-b&sq=coskata&st=ny
7. http://www.wired.com/wired/archive/14.10/ethanol_pr.html
8. http://blogs.edmunds.com/greencaradvisor/
9. http://wheels.blogs.nytimes.com/2008/05/13/2010-endgame-or-hype/index.html
10. http://www.coskata.com/
11. http://en.wikipedia.org/wiki/Corporate_Average_Fuel_Economy
12. http://wheels.blogs.nytimes.com/2007/09/24/corn-ethanol-biofuel-or-biofraud/
    

The major loophole involves still giving extra mileage credits for flexible-fuel vehicles. These are vehicles that can operate on regular gasoline or an alternative like E85, a blend of 85 percent ethanol and 15 percent gasoline.

Even if these vehicles never use a drop of E85, the automaker gets credit for about 50 percent better mileage than the vehicle delivers on gasoline.

Here’s how Mr. Becker explains it: “If I am G.M., God forbid, and I produce a certain number of flexible-fuel vehicles capable of running on E85 ethanol, they will be assumed to be running on ethanol 50 percent of the time. So the fuel economy of a 20 m.p.g. truck that is technically capable of running on E85 will essentially be 30 m.p.g.

“Because the auto companies are not as stupid as they look, they have chosen to make most of their flexible-fuel vehicles their least-efficient vehicles. So they get the maximum fuel economy benefit.”