Cover Page

Title:

Cellulosic and Corn Ethanol

Name:

Saurabh Kapadia

Major:

Economics and Finance

Date:

04/29/2014

Audience: Energy Activists and U.S. Department of Energy

Summary: In this paper, I will presenting the facts about ethanol as a fuel to the
Energy Activists and the Department of Energy and try to reach to an
answer for the question, Can Ethanol be the fuel of the future?

Executive Summary:

In this paper I have summarized the pros and cons of using ethanol as a fuel and
the impacts of using ethanol as the primary fuel in the future. I have also outlined
the other considerations for future fuels such as renewable sources of energy (Sun,
Wind etc) and what advantages ethanol has when compared to those other
alternatives and discussed whether Ethanol has the potential to become the fuel of
the future.
Furthermore, I have highlighted the new research going on in the field of ethanol
and what those changes will mean when considering ethanol as a primary fuel.
At the end I talk about the most recent EPA policy proposals about ethanol which
was proposed last month on November 18, 2013 and I go on to explain what the
researchers and policy makers in congress think about those proposals.

Introduction and Background:

Considering the energy industry today, the need for a big change in energy
production and usage is no longer debatable.
One reason why this change is necessary is that we are highly dependent on gulf
countries for crude oil. Huge amounts of gasoline and crude oil are being imported
daily. These imports not only drive the countrys economy down but they also make
our country vulnerable as we highly depend on those imports for our basic day to
day needs. If the gulf countries stop exporting or if the oil reserves start
diminishing, the country will be face a huge risk of an energy crisis.
Other big reason why we need to switch to alternate sources of energy is the
increasing use of fossil fuels. Burning billions of gallons of gasoline and other fossil
fuels is increasing environmental pollutions and causing more deaths. The drastic
effects of increasing greenhouse gases are well known and this leads to changes in
the global climate faster than ever.

The Issue:
With the volatility of gas prices, import taxes and changing global politics, the
economy of the oil importing countries is going down. It is hard to break our
addiction to oil but it needs to happen because oil and other fossil fuels, fortunately
or unfortunately are not going to last forever. The drastic impacts on the economy,
environment and the diminishing supply of fossils fuels in the world raises a big
question: If not fossil fuels, what will satisfy our thirst for energy?
This question is one of the biggest problems in the world today and has been
haunting every energy dependent country for several years. Every year billions and
3

billions of dollars are spent by almost every country for research and improvements
in technology to come up with the best possible solution to this upcoming
unavoidable energy crisis. Considering the various answers to the above mentioned
question leads us to the following question, Are biofuels the next best energy
source?
Possible Solution:
Biofuels are fuels made from biomass and thus are cheaper when compared with
fossil fuels. One other reason why biofuels are considered over the other
alternatives is because biofuels can be made from corn and soybean which can be
abundantly found in the US. The most abundantly considered biofuel today is
ethanol. The idea of using ethanol as a fuel is not a new one. Henry ford used
ethanol as a fuel to power the first vehicle, even before gasoline was even
considered as a fuel. It is fairly contradicting that ethanol is being considered as an
alternate fuel today.
Ethanol is a form of alcohol and in the USA; it is usually made from corn. Different
sources are used in different parts of the world to produce Ethanol. In Brazil, it is
most commonly made from sugarcane. Other sources of ethanol include wheat,
potatoes and barley. Ethanol can be made in a few different ways. Traditional
bioconversion processes to produce ethanol are from Corn, Starch and Sugar. The
most common of these processes of making ethanol includes gasification. In a
commercial ethanol producing power plant the process starts with corn kernels in
the factory. Next steps include separating starch from the grain followed by
converting starch to glucose. Glucose is then fermented with the help of yeast into

ethanol. This process of making ethanol by fermenting through yeast is not a new
one and the same process is used for brewing beer and also in baking.
Pros and Cons:
Making Ethanol by the traditional process produces very dilute ethanol and thus we
have to distill out the water content to get concentrated ethanol. This is the most
controversial process because it raises the most important question, how much
energy does it take to make ethanol? And is it even worth the resources and energy
to produce this alternative fuel. Other issues of producing ethanol include:

Food vs Fuel debate

Cost of starch

Pollution issues

Byproducts (distillation grain)

If we are using fossil fuels to do the distillation, is it really ecofriendly?

One of the biggest issues with using ethanol as an alternative fuel is the food vs fuel
debate. Because corn is mostly used to produce ethanol, food prices continue to go
up because ethanol producing power plants are using most of the corn produced
causing shortage in corn for the corn based food industry thus making the corn
prices higher. That raises the question, whether corn should be used for producing
food products or for producing fuel (ethanol).
There are also issues about pollution while producing ethanol because fossil fuels
and natural gas are mostly used in the distillation part of producing ethanol. These
pollution concerns distract people from the environmental advantages of the
combustion of ethanol over fossil fuels. Also if we are using fossil fuels to generate
5

alternative fuel, do we actually gain energy or lose energy in producing ethanol?

These are important questions that need to be answered if we are considering
ethanol as the main fuel in the future.
Other issues about ethanol production include the byproducts produced in the
process. Distiller grain is the solid byproduct which takes up huge amounts of space
in the power plants and more production of ethanol would only increase the
byproduct. Ways to get rid of the solid grain are limited and needs to be improved if
ethanol production is to be increased.
There has also been talk about how future ethanol producing power plants would
use biomass instead of corn for producing bio-ethanol. Using biomass instead of
corn means using cellulose instead of starch which solves the problem of food over
fuel however it is not easy to break down cellulose to glucose and the process is
more expensive. One alternative to that is using acid to break down cellulose which
reduces the cost of breaking down cellulose to glucose. However, using acid
reduces the yield and the glucose produced using acid is recommended to undergo
pre-treatment before being used to produce ethanol. These pre-treatment processes
add to the cost of overall production and raises serious economic questions.
Despite all these disadvantage and problems caused by ethanol power plants,
Ethanol has various advantages which in my opinion exceed the disadvantages and
make ethanol the number one contender in the race for future fuel options. There
has been various improvements and research in the above mentioned problems,
thus reducing the disadvantages.
The food vs fuel problem can be solved if EPA withdraws the ethanol production cap
raising the prices of corn and giving farmers the incentive to grow more corn to
6

meet the demands for both, the food and fuel industry. Ethanol industry helps the
demand for corn thus boosting the low corn prices and gives farmers the
opportunity to earn a modest profit. The other problem of dealing with the solid
byproduct is also easily manageable. Distiller grain the byproduct produced during
ethanol production contains 40% protein and 15% fat making it a high value
product. This byproduct has been used to feed cows and pigs. Using the by-product
as a livestock feed is an easy and practical solution for dealing with the solid
byproduct.
Bio-Ethanol can be considered an important fuel for the future because of the
reasons ranging from energy security and energy independence to job creation to
deficit spending and finally to public health.
Current Ethanol productions (14 billion gallons per year) will reduce the imports of
crude oil by more than one third thus reducing the trade deficit in crude oil which
has been increasing drastically. The trade deficit which was 27 billion in 1987
increased to 50 billion in the year 2012.
The answer to the question, do we actually gain energy or lose energy in the
production of ethanol? Also reassures us that ethanol can be a possible future fuel.
Although there can be many answer to the above question considering the number
of factors you consider in calculating the amount of energy required in the
production of ethanol. It has varying factors such as would you consider the
fertilizer energy used in producing Corn in the total energy used? , Would you
consider the fuel energy used in transporting corn to the power plant? Aside from all
these varying factors, a general research calculated that 1 gallon of fossil fuel used
in the production process produces 1.3 gallons of ethanol.
7

Ethanol is usually used as an addition to gasoline in the fuel used for vehicles and
because of the alcohol content in ethanol, the fuel burns better with the mixture of
ethanol in gasoline. The most common forms of fuel are E10 and E15 which are
10% and 15% ethanol mixed with gasoline respectively. Gasoline is the largest
source of man-made carcinogens in the atmosphere. However, adding ethanol to
gasoline reduces the carbon-monoxide emissions by 10%-30% depending on
combustion technology. Thus adding ethanol in the fuel saves thousands of lives
and reduces pollution.
Being a Finance and Economics major, what attracts me most towards ethanol as a
fuel of the future, are its economic advantages. Ethanol production plant creates
jobs in the rural areas, solving the problem of unemployment and helping the
economy of the country. According to the Renewable fuels Association, ethanol
production in 2012 alone added more than 365,000 jobs across the country. In its
2002 study Ethanol and the Local community AUS consultants and SJH and
company found that with approximate cost of 60 million dollars a year, an ethanol
plant expands the local economy by approximately 110 million dollars, creates 700
jobs and increases the tax revenue for local and state government.

Renewable sources of energy such as sun, wind and hydro are usually said to be the
cleanest sources of energy. However, these cannot be considered as the fuel of the
future because these sources of energy are highly fluctuating and thus we cannot
depend on them. It is not always sunny and windy throughout the year and thus the
energy produced from these sources of energy is limited and fluctuating. Hydro
energy is maxed out in most of the countries. Considering ethanol over all of this, it
takes 65 hours to convert corn kernels to ethanol, which is ready to be shipped. And
it only takes about 100 days to grow corn which shows that corn ethanol is a source
of energy which can be produced very fast and can therefore be consistent.
Recommendations:
Along with all the above mentioned advantages there has been more ongoing
research to improve the production and usage of ethanol. Other considerations
along the lines of ethanol in the future include the use of E85 which is 85% ethanol
and 15% gasoline. The more ethanol content helps the fuel burn better, reducing
the harmful emissions. Vehicles today dont have the engine to support this E85
which is better for the environment and cheaper. However, FFVs (flex-fuel vehicle)
9

are now available which can run on E85 fuel. To add to that, FFVs are almost the
same cost as a normal vehicle which will make it a strong competitor in the future
once more E85 fueling stations are available. Also, research has been going on in
producing other biofuels which have a higher heat density than Ethanol and these
can be used as a drop-in fuel which means that they can be used in the current
engine without any modification to the engine. These drop-in fuels include butanol
and propanol. The only thing stopping them is the high startup production costs.
With ongoing research there is a strong possibility that there can be improvements
in its production process making it affordable.
Also last year on November 18th, the EPA (Environmental Protection Agency) issued
a proposal for the rule on ethanol that has serious effects on the current energy
market. The proposal is to make a mandate on increasing the amount of ethanol
that goes into the fuel. Researchers are saying that the mandate on ethanol doesnt
work as effectively as the EPA thinks and refineries today already mix as much
ethanol into the fuel as the current engines can sustain. The proposal, if approved
will have serious shortage of ethanol thus driving the fuel prices up. EPA justifies
this proposal as there is a shortage of corn for food industries because majority of
the corn is being used up by the fuel industry. The congress is strongly against this
as the rise in fuel prices will be in 2014 which happens to be a election year. To
counter this proposal of the mandate, congress is planning on proposing to import
more sugar based ethanol which will have to be imported from Brazil. Researchers
dont agree with either of those tactics by the EPA or the congress and they think
that given time and with better engines the ethanol proportion in the fuel will go up
voluntarily by the refineries. The EPA will be holding a public hearing in the near
future to discuss the merits of the proposal.
10

All of these advantages along with new research and improvements and better
support in policies from the EPA and Congress can really make ethanol the fuel of
the future.

11

Sources:

The Health Benefits of Ethanol

Ethanol Across America. Fall 2010, ICM inc.
04/29/2014,
http://www.ethanol.org/pdf/contentmgmt/Health_Benefits_of_Ethanol_Fall_201
0.pdf

Lucier, James. The new economics of ethanol

The hill, Congress Blog. Lucier, James.
December 4th 2013, The Hill.
04/29/2014, http://thehill.com/blogs/congress-blog/energyenvironment/191947-the-new-economics-of-ethanol

Ethanol Benefits and Considerations

The Alternative Fuel Data Center, U.S. Department of Energy's Clean Cities
program.
10/24/2013, U.S. Department of Energy.
04/29/2014, http://www.afdc.energy.gov/fuels/ethanol_benefits.html

Layton, Julia. "Is ethanol really more eco-friendly than gas?"

24 January 2007. HowStuffWorks.com.
29 April, 2014, <http://auto.howstuffworks.com/fuel-efficiency/alternativefuels/ethanol-facts.htm>

12