The Good News on Ethanol: U.S. a ‘Biofuels Superpower'

by Dan Morgan (Des Moines Register) ... President Barack Obama didn’t mention ethanol, biofuels, or agriculture in his State of the Union address, even as he boasted that the country was “number one in oil and gas.” Yet a thriving renewable fuels industry also deserves a share of the credit for the energy renaissance.

Based on numbers from the Department of Energy and the oil industry, the amount of ethanol used daily in the United States is now roughly equivalent to the gasoline from 1.2 million barrels of crude oil. That’s about the volume of oil from North Dakota’s Bakken shale, and only slightly less than Qatar’s daily output in 2014.

Without ethanol, global stocks of oil would have been lower and crude oil prices would have been $10 a barrel higher at the end of 2013, according to a study last year by economist Philip K. Verleger Jr., an energy adviser to Presidents Gerald Ford and Jimmy Carter. Ethanol sold for less than gasoline for all but seven weeks between the start of 2011 and last November, according to data collected by Oil Price Information Service and New York Mercantile Exchange. “Blending ethanol with gasoline has been profitable to the refining industry and some of that has been passed on to consumers,” said Scott Irwin, a University of Illinois agricultural economist.

The United States is now a biofuels superpower, having overtaken Brazil in 2007 as the top producer in the world. Nearly 5 percent of all energy used by the transportation sector now comes from “non-petrochemical” sources, mainly biofuels, and almost all “regular” gasoline contains 10 percent ethanol, known as E10. NASCAR drivers have used an even higher blend since 2011. Along with fuel, the country’s 213 ethanol plants produce a mountain of food: concentrated meal to feed livestock, derived from the one-third of the corn kernel that is protein, oil and fiber.

... President Obama, once an enthusiast, last mentioned ethanol publicly on Aug. 17, 2011, when he stressed the need to “figure out how we can make biofuels out of things that don’t involve our food chain.”

With its very high octane rating, ethanol does what toxic lead and other now-banned compounds once did. It helps give gasoline an octane boost to prevent engine knock and optimize engine performance. That role is important enough for the Federal Trade Commission to require that octane ratings be displayed prominently on gasoline pumps. At the same time, the relatively cheap octane from ethanol has been good business for many refiners, say oil industry analysts. It has enabled some to divert costlier octane-boosting oil compounds from gasoline to more lucrative petrochemical uses such as polyester fibers and compact discs.