Ethanol: Fueling a Rural Revival

Climate Solutions

Today rural America is in trouble. Low crop prices are squeezing families off the land and farm populations are declining to unprecedented lows. Many small towns have trouble maintaining stores and services.

At the same time, oil imports have reached record highs. The US now buys more than half its petroleum from foreign countries. Already the largest single contributor to the trade deficit, money for overseas oil purchases represents income bleeding away from rural communities. The oil tanker pulling into the harbor and the small town full of boarded-up storefronts are two sides of the same coin.

The solution to both dilemmas just might be ethanol (ethyl alcohol), a grain-based fuel that was once the fuel of choice in the earliest days of the Auto Age. Ethyl alcohol – the same stuff that puts the buzz in beer, wine and liquor – is a powerful energy source with a long history as a vehicle fuel. Henry Ford’s first Model-T was designed to run on ethanol.

Ethanol offers a great opportunity to convert much of our transportation system to a cleaner-burning fuel while creating a new base for rural prosperity. A dollar spent to buy a gallon of gas in Nebraska would wind up going to oil producers in Texas or Saudi Arabia. With ethanol, 80 percent of each dollar generated by an ethyl alcohol plant is spent within a 75-mile radius of the site.

Nearly 90 percent of US ethanol production capacity, around 2.3 billion gallons annually, is centered in the Midwest and 90 percent of the ethanol is derived from corn. Many industry experts project that ethanol’s share of the fuel market – currently equal to around 1.2 percent of US gasoline consumption – will triple within this decade as the industry expands to new regions and develops other crops as fuel feedstocks. For example, the first two commercial ethanol plants planned for the Pacific Northwest are expected to convert substantial amounts of wheat into ethanol.

Ethanol offers compelling advantages. With its one-third oxygen content, it makes engines run longer and cleaner, with 20 percent less carbon monoxide, resulting in reduced ground-level ozone.

Ethanol is Here Now

Ethanol is already widely available as a so-called E10 mix – a blend of 10-percent ethanol and 90-percent gasoline. While newer cars are running cleaner and thus gradually eliminating the need for fuel oxygenates, another environmental benefit of ethanol is gaining in importance: It substantially cuts global warming emissions.

Each gallon of ethanol used in E10 represents a 12 to 19 percent greenhouse gas reduction. Each gallon used in E85 (a blend of 85-percent ethanol to 15-percent gasoline) cuts global warming gases 17 to 24 percent. Since E85 displaces 11 times more gasoline, the overall global warming impact is significantly lightened.

Eventually, when cellulose such as grasses replaces starch feedstocks in making ethanol, the potential exists to “zero-out” greenhouse emissions entirely.Though E10 produces increased volatile organic compound emissions (VOCs) in hot summer temperatures, it eliminates other emissions, so the net reduction in total toxics is 30 percent. Engines still run cleaner on E10 than straight gasoline. E85 produces fewer VOCs.

Ethanol’s chief fuel oxygenate competitor, fossil fuel-based MTBE, has begun leaking from gas pumps and storage tanks, posing a huge groundwater pollution problem. When California phases out MTBE next year, ethanol will take up the slack. The California Energy Commission foresees this increasing the ethanol market by 1 billion gallons per year.

All gasoline-powered vehicles can use E10 with no operating problems. In fact, most of today’s engines could handle a 22 percent ethanol mix and run just fine. Every year, the big three automakers sell half a million Flexible Fuel Vehicles (FFVs) capable of operating on E85 – at a cost comparable to conventional cars. Currently, 99 percent of all ethanol is E10.

Access is a major barrier standing in the way of an immediate, massive nationwide conversion to “green” fuel. There are only 95 public (and 30 limited access) E85 stations in the US, located mostly in the Midwest with a few in the Northwest. The Ford Motor Co. recently doubled the number of public E85 filling stations in Minnesota by funding the installation of 50 new pumps. Public-private partnerships could build expanded markets for FFVs and a national network of E85 fueling stations.

New technology coming this decade will allow the ethanol industry to move from starch feedstocks to cellulosic material from fast-growing grass crops and residues from farms and forests. Because cellulose is far more abundant and cheaper than starch, the cost of cellulose-based ethanol could drop below the price of gasoline in two decades and, if gas prices lock in at $2 per gallon and above, far sooner.

Cellulosic ethanol offers solutions to other pollution problems. For example, much of the stubble from rice fields in California and wheat fields in Oregon and Washington is now burned, creating a major air pollution problem. Much of this crop waste could be economically baled and shipped to local ethanol plants, turning what is now a headache into wealth for farmers.

States can play a significant role in building ethanol industries. Minnesota, widely regarded as the nation’s ethanol policy leader, mandates ethanol in virtually all gasoline sold in the state. Minnesota also provides loans to build cooperatives – 90 percent of all ethanol in the state is produced by farmer-owned coops – and supplies a 20-cents-per-gallon producer subsidy. The overall benefit to the state in increased economic activity, after program costs are subtracted, is $109-260 million annually, a state legislative audit shows.

Henry Ford called ethanol “the fuel of the future.” That future has now arrived.

Patrick Mazza is the co-author of Stormy Weather: 101 Solutions to Global Climate Change and staff writer-researcher for Climate Solutions. For the project’s new report on ethanol, go to

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