Ethanol vs gasoline (Hype or Real?)

Ethanol is all the rage these days. From major ad-campaigns from GM (Live Green, Go Yellow) to the almost ridiculous increase in investments and IPOs of ethanol producers, everybody seems to be discussing what to do with this new fuel. Is this really a renewable fuel (my answer: no!, it is certainly not sustainable), is this really going to solve our energy security problem (my answer: maybe), is it good for the environment (my answer: if at all, very slightly but will still contribute to global warming), or is this really a farmer/red state hype to get more subsidies and tax credits (my answer: there is definitely a lot of hype because of the midwest politics, tax subsidies and hedge fund investments).

I am not an energy expert by any stretch of imagination, but I do enjoy learning more about it, especially when it comes to new technologies and its potential business/environmental implications. I have spent some time looking into ethanol and if I was to make an elevator speech I would recommend proceeding cautiously on ethanol simply becaus eof the market forces that seem to have taken over (looking for short to medium term financial gains) and because the long term play would probably still require renewable energy sources. The only thing I can certainly say about ethanol is that if the complimentary bio-engineering technologies mature, it can certainly reduce dependence on fossil fuel without having a perverse impact on the greenhouse gas emissions (what happens to rainforests/farmland/food crops is still an open question, though).

The big debate about ethanol is if it takes more energy to produce ethanol than you get out of it. We all should know that for each gallon of ethanol, we will get about 20-30% less miles on the road when compared to a gallon of gasoline. However, the loss of miles traveled per fuel refill can be rectified by having bigger tanks on board (added weight may impact fuel economy a little more). But on the energy question, Vinod Khosla, a respected technology leader and venture capitalist, would argue that his analysis shows ethanol has a net positive of 15-50% more energy than ethanol per litre. In fact, he ssems to suggest that if sugarcane or technology for production of ethanol cellulosically is enabled, that net positive value can increase to 4x-8x the input energy. The attached plot from a study comparing 6 different assessments seems to suggest the same. Biggest critics of this claim, however, include serious researchers such as David Pimental of Cornell University, and Tad Patzek of Univ. of California Berkeley. They argue that based on total production costs (including enegy use dby refineries etc) it takes up to 70% more enegy to grow corn and produce ethanol than the amount of energy recovered from it. This serious claim deserves considerable attention since a net negative fuel source can hardly be considered an improvement - however it must be undestood that as technologies have improved, crop yields and ethanol per acre of crop have grown dramatically. and the energy to produce ethanol has gone down If cellulosic ethanol from crop varieties such as switchgrass become possible, these yields would only go up higher. For example, a paper published in Science by Berkeley team has calculated a Net Energy Value (Output energy - Input energy) for corn ethanol of 4.5 MJ/Liter and for cellulosic ethanol a Net Energy Value of 22.8 MJ/L.

So what do I like about ethanol: Well, at least its a recognition of the fact that people need to seriously start considering alternatives to fossil fuel. (a) ethanol has more bound oxygen and hence burns clean, (b) ethanol can be grown locally - and hence countries in the developing parts of the worls can have access to a fuel source. The growth of ethanol production in Brazil (upto 40% reduction in gasoline consumption) had much to do with regional politics of balancing power of Venezuela that had oil. (c) ethanol may be cheaper than gasoline, (d) ethanol is forcing the technology entrepreneurs to look into biofuels and efficient production processes. What do I not like: (a) ethanol is not a renewable and sustainable fuel source. (b) ethanol contibutes to global warming and criteria pollutants the same way as gasoline. (c) ethanol is heavily subsidized in the US, leading to a control over imports from developing countries. (d) Net energy content may be negative. (e) ethanol is driving attention away from cleaner technologies, such as hybrids, fuel-cells, solar, wind (e.g. Ford just pulled back from its committment to hybrids). (f) crop-farming for ethanol production using corn and sugarcane could be disastrous for the eco-systems if scaled unsustainably. Net: I would tend to be cautious in investing in large scale ethanol productions and would only encourage it to be used at smaller scales where it may be grown sustainably. Technology to further improve ethanol net energy content is much needed and shoul dbe funded. The Senate Energy Bill 2005 requires ethanol production to increase to 7.5 billion gallons per year within 10 years. If that is what Pres. Bush meant by getting rid of oil addiction, I don’t think he understands the non-neo-conservative angles of the issue at all.

A big proponent of E-85 ethanol fuel, and of converting 70% of all gasoline vehicles to ethanol-ready (also called Flex Fuel vehicles FFVs) is non other than the Silicon Valley giant Vinod Khosla. Vinod has given a lengthy presentation on this to major policy makers but here’s one of him giving it to the geek squad at Google.

References:
1. Ethanol Can Contribute to Energy and Environmental Goals, Alexander E. Farrell, Richard J. Plevin, Brian T. Turner, Andrew D. Jones, Michael O’Hare, Daniel M. Kammen; Science (2006), 311, 506-508.
2. http://en.wikipedia.org/wiki/Ethanol
3. http://www.eere.energy.gov/afdc/altfuel/ethanol.html
4. Kholsa Ventures and Biofuels presentation
5. Patzek, Tad W. “Thermodynamics of the Corn-Ethanol Biofuel Cycle.” Critical Reviews in Plant Sciences, 23(6):519-567. 2004. Updated, 24 February 2006. Accessed 11 May 2006.

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