Megan K.

Pitz

As an alternative source of energy, ethanol first emerged in response to the instability of foreign
oil markets. As Yacobucci notes, “a frequent argument for the use of ethanol as a motor fuel is
that it reduces U.S. reliance on oil imports, making the U.S. less vulnerable to a fuel embargo of
the sort that occurred in the 1970s” (CRS-14). Yet following the 1970s, fuel ethanol was
developed for environmental purposes as well. Due to its chemical properties, specifically its
ability to function as a fuel oxygenate, ethanol was useful in helping industry comply with the
Reformulated Gasoline (RFG) standards set forth by the Clean Air Act Amendments of 1990.
Recently, in 2005, the use of ethanol has once again emerged onto the agenda, this time in
response to the Renewable Fuels Standards (RFS) set forth by the Energy Policy Act of 2005
(P.L. 109-58).

Although the Energy Policy Act mandates an increase in the use of renewable fuels in general,
ethanol is the primary means through which RFS requirement will be met. As the history of
ethanol attests to, the environmental and economic implications of this act are significant. In
terms of the economy, analysts across the country forecast the RFS will result in a doubling of the
U.S. ethanol market within the next six years. With respect to the environment, the increased use
of ethanol is projected to affect a greater reduction in the harmful emissions which deplete the
ozone layer and produce greenhouse gases.

While the projected environmental implications of the RFS are fairly straightforward, it is not
entirely clear whether increasing the amount of ethanol in gasoline will actually lead to
environmental improvement. Since the 1950s smog and air pollution has increasingly become a
public health concern, yet analysts are still debating the environmental merits of ethanol, the
primary means through which Congress is addressing this concern. Furthermore, while the
Energy Act promises to “secure jobs for our future with secure, affordable, and reliable energy”
and President Bush claims the bill will strengthen the economy and promote energy
independence, ethanol’s role in ensuring such economic gains is uncertain.

With so much riding on ethanol as a means to affect environmental and economic improvements,
it is important to ask, analyze, and ascertain whether the increased use of ethanol mandated by the
Energy Act’s RFS is in fact effective in securing these goals. Is ethanol more economically
beneficial than other renewable fuels? As the case of Methyl Tertiary Butyl Ether (MTBE) use in
response to Congress’s RFG requirements demonstrates, economic benefits must be considered
separately from environmental concerns and failure to do so has serious ramifications for public
health.

In 2005, the American Coalition for Ethanol cited the Renewable Fuels Standard set forth by the
Energy Policy Act as “the most important public policy goal of the U.S. ethanol industry,” noting
ethanol’s importance in terms of establishing not only energy independence but also “economic
prosperity and a clean environment”. Indeed, in its possibility as a joint solution to concerns that
have traditionally been at odds with each other in the public policy arena, the increased
development of ethanol as a renewable fuel is a key public policy issue.

Annotated Bibliography:

American Chemical Society. (2006, March). How Green is Ethanol? (Environmental News,
Environmental Science & Technology/March 15, 2006). Iowa City, IA: Christen, Kris.
 • The author, a contributing editor to Environmental Science and Technology (ES&T), a
journal published by the American Chemical Society and edited by University of Iowa
Professor Jerald Schnoor, addresses the debate over ethanol’s environmental impact by
examining energy balance as an indicator of environmental benefit.

• This article confirms the idea that ethanol is better for the environment and highlights the
comparative benefits of cellulosic ethanol for achieving energy balance, providing a
review of several studies which indicate cellulosic ethanol has greater energy returns than
traditional corn-derived ethanol. Significantly, this article provides a summary of
research findings (Hammerschlag and Farrell) indicating that the increased Renewable
Fuel Standards (RFS) set forth by Congress’s Energy Policy Act of 2005 can best be met
through the use of cellulosic ethanol.

American Chemical Society. (2006, February). Ethanol’s Energy Return on Investment: A

Survey of the Literature 1990-Present. (Environmental Science & Technology, Vol. 40, No. 6,
2006). Seattle, WA: Hammerschlag, Roel.

• This survey addresses energy output, one Yacobucci’s four main areas of policy concern
vis-à-vis ethanol and attempts to answer the question of whether ethanol produces a
positive return on investment (RE ).

• Hammerschlag’s work is of particular importance to an analysis of whether Renewable

Fuel Standards (RFSs) for ethanol produce economic benefits for the public because it
“takes an objective look at the disagreement [over ethanol’s economic benefit] by
normalizing and comparing the data sets from ten such studies” (2006, Abstract, p.1).

American Chemical Society. (2006, November). Push on Hill for Fuel Independence:
Lawmakers seek to cut U.S. demand for oil, boost biofuels and alternative-technology vehicles
(Chemical and Engineering News, Government and Policy). Iowa City, IA: Hess, Glenn.

• The author, a contributing editor to Chemical and Engineering News, writes about
Congress’ recent interest in alternative fuels such as ethanol as a means to achieve the bi-
partisan economic goal of energy independence.

• This article is significant in providing a broad overview of Congress’s view of energy

independence, one of Yacobucci’s four main areas of policy interest with respect to
ethanol.

Lynd, Lee R. (1996). Overview and Evaluation of Fuel Ethanol from Cellulosic Biomass:
Technology, Economics, the Environment, and Policy. Annual Review of Energy and the
Environment, 21: 403-65.

• Although writing nearly ten years prior to the Energy Policy Act of 2005, Lynd, a
professor of Engineering at Dartmouth, provides a well-informed evaluation of the
economic and environmental merits of cellulosic biomass or ethanol technology.

• Lynd acknowledges the lack of attention in policy debate to cellulosic ethanol and
proposes a program of incremental transfer from traditional corn-based ethanol to
cellulosic feedstocks. In 2003, Lynd advocated this position to policymakers at the
National Commission on Energy Policy Forum held in Washington, DC.
McIntyre, Kevin J., Kirkwood, Martin V., and Leif, Jason F. (Eds.). (2006). Energy Policy
Act of 2005: Summary and Analysis of Act’s Major Provisions. Newark, NJ: LexisNexis,
Matthew Bender.

• The authors, partners specializing in energy law and regulation at the Washington D.C.
and Houston, TX offices of law firm Jones Day, provide an analysis of the Energy Policy
Act of 2005.

• This book covers the major provisions of the Energy Policy Act of 2005, examining its
impact on the “development, use, and regulation” of renewable energy and includes a
separate analysis of the act’s impact on ethanol.

Yacobucci, Brent D. (2006). Fuel Ethanol: Background and Public Policy Issues. CRS Report
for Congress (CRS-1 – 23). Washington, DC: Congressional Research Service, The Library of
Congress.

• In this report for Congress, the author, a specialist in Energy Policy in the Resources,
Science, and Industry division of the Congressional Research Service (CRS), provides
both a substantive overview of energy policy as it relates to fuel ethanol and an analytical
discussion of the various environmental and economic costs and benefits associated with
ethanol usage, particularly with respect to the implications of the drastic increase in usage
mandated by the Energy Policy Act of 2005 (P.L. 109-58).

• The report is significant in its identification and assessment of four main areas of policy
concern, including ethanol’s energy output, ethanol’s effect on petroleum reliance or
energy dependence, ethanol’s effect on greenhouse gas emissions, and the merits of
maintaining current federal policies. This report is also significant in identifying “a
renewable fuels standard” or RFS as a key area of “policy concern and congressional
activity” (CRS-16), and discussing the practicalities of RFS implementation, including
the relative economic and environmental merits of cellulosic ethanol as an alternative to
traditional corn-based ethanol. This report cites and agrees with the Argonne National
Laboratory Study and a meta-study, both which advocate the use of cellulosic ethanol to
better reach the environmental and economic goals associated with RFSs.