Update: E85 in Indiana and the "Ethanol Myth"
Topic: Transportation
Posted: Fri, Sep 8, 2006 
A while ago I wrote about E85’s emergence in the region. (E85 is an alternative fuel made of 85% ethanol and 15% gasoline, and can only be used (reliably) in vehicles with specially designed engines.) In my first post, I felt that E85 was likely to have a positive financial impact on the local economy, would be more environmentally friendly that regular gas, and would lead to less dependence on foreign oil. Not surprisingly, local politicians like Richard Lugar have made arguments along the same lines.
But recently, Consumer Reports (CR), a non-profit organization generally thought to be objective, has published an informative article on E85 (the online version is abridged) in its October issue. Their findings cast doubt on E85 as a sustainable alternative fuel on a number of fronts, and provided what I learned reading it, I felt a follow-up was needed to clarify its pros and cons.
In CR’s tests on a Chevy Tahoe (a so-called “flexible fuel vehicle” (FFV) able to run on E85 or regular gasoline) its fuel efficiency when burning E85 was 27% less than regular gasoline. If this figure holds for other FFVs being developed -- something CR expects and other sources confirm based on E85's inherent energy potential -- this would effectively mean that the net cost of using E85 would be more than using regular gas (CR assumed August prices of E85 to be $2.91/gallon; when factoring in E85’s lower fuel efficiency, they translate this into a net cost of $3.99/gallon.)
E85’s relative fuel inefficiency is discouraging. In order for consumers to break even, the cost of E85 needs to stay below 27% that of gas. Prices of E85 have been below this level in Indiana before, but tend to fluctuate, and have recently been relatively high. But even with the unpredictability of E85’s price, there’s little risk in buying an FFV because you can choose which fuel to burn based on market conditions, or your own political calculus.
Regarding the environmental impact of E85, CR did confirm that the particulate emissions that cause smog and contribute to global warming were reduced when burning E85. However, a probable carcinogen called Acetaldehyde was found in E85 emissions. Despite this, CR concluded that E85 was more environmentally friendly than regular gas.
Complicating the environmental impact of E85 is the debate over ethanol’s “energy balance,” or how much energy it takes to make ethanol versus how much we can get out of it in our vehicles after it has been converted to E85. The CR article cites evidence on both sides of this argument, ranging from a 30% deficit to a 40% surplus. A similar debate is raging around the benefit or cost to the environment related to pollutants produced in the production of ethanol versus what would be gained by its use (again, with arguments on either side). With E85 gaining favor by the state and federal government and major U.S. automakers, it seems certain that more researchers will weigh in on this soon to provide more evidence one way or another.
CR also makes the case that because of “generous fuel-economy credits” from the federal government, automakers are improving profits by developing FFVs in SUVs, which may ultimately mean consumers are given more opportunities to buy gas guzzlers, which will in turn lead to more fuel consumption overall. But here’s an idea: why not offer better credits for making cars that are already considered fuel efficient run on E85 (say 25 or 30 MPG or better). If CR’s numbers are correct, these cars would be less efficient, but considering they were relatively efficient to begin with, they’d still do much better than SUVs. Or better yet: offer sweeter credits for the development of hybrid FFVs!
In spite of the CR article, E85 still seems like it could end up being a good thing for Indiana and the Midwest more generally as we have lots of corn that’s needed to produce ethanol, but potentially a red herring for consumers, only a partial solution to our foreign dependence on oil, and have uncertain benefits to the environment.
If there are any energy experts in the crowd, I’d love to get your perspectives!
Postscript: As I was writing this, I learned something that’s maybe obvious in retrospect: gas stations won’t tell you how much gas costs over the phone. I guess they don’t want people calling around to find the lowest prices. You know what I say to that? Check out AAA’s site!
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» E85 Picking Up Speed? from IndyScribe
Recently I've been hearing more and more local buzz about E85, which is a cleaner and less oil-dependent fuel mixure of 85% ethanol and 15% gasoline. I've read about success stories in Brazil for awhile, and occasionally heard it knocked... [Read More]
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Comments
1. Sep 13, 06 08:18 AM | Jennifer Bortel said:
This morning, NPR had a segment on a possible "unintended effect" of ethanol: the increase in the price of your bacon. Because pig farmers rely on large quantities of corn to feed the animals, the diversion of that food to make ethanol could increase the cost of corn (supply and demand, etc.), thus increasing the cost of your Christmas ham.
2. Sep 13, 06 08:20 AM | Rick Stewart said:
If a gallon of ethanol does not produce the same amount of power as a gallon of gasoline and will take alot of corn out of the food market just explain how it can be a help.?
3. Sep 13, 06 09:09 AM | Steph Mineart said:
I heard the same NPR report and wondered how it would affect my grandfather, who's both a corn and pork farmer in Iowa. Presumably if corn production increases enough to cover the demand for both ethanol production and food, it should help. I remember reading something about how we can't possibly produce enough corn to create enough ethanol to fuel the world's cars, but I'm having trouble finding that data, and from what I'm googling, there seems to be fierce debate about that.
4. Sep 13, 06 10:18 AM | Jim Chalex said:
To Jen's comment, I didn't hear the NPR segment, but this additional example is in the spirit of my follow-up: upon further review, the promise of Ethanol isn't as clear as one might think, and unintended consequences abound.
To Rick's comment, based my understanding, you're right that these two factors are some of the "cons" of using ethanol. Some of the "pros" are that it would be better for the environment, and it would be good for regional producers of corn. (And some of this is still open to debate, as I tried to explain in my post.) So ultimately the answer to the question "Is Ethanol/E85 a good idea" largely comes down to one's individual perspective on these pros/cons, and the usefulness of the research being done to determine the pros/cons.
To Steph's comment, I too have read that given current corn production, we'd only be able to cover a fraction of our total demand for fuel. Here's one article that provides several different scenarios for what this fraction might be -- they're all quite low, below 13%:
http://www.energybulletin.net/16400.html
As I continue to learn more about this issue, I'm more convinced that Ethanol and E85 could be a useful *aspect* to a broader program to reduce our dependence on foreign oil, but it would not be a panacea. Having said this, assuming one agrees with the premise that we should reduce our dependence on oil, experimentation with alternate sources of fuel -- even if they end up having mixed or unintended results -- seems a necessary and positive step to reach this goal.
5. Sep 15, 06 07:23 AM | Jim Chalex said:
Plans were released today to develop another ethanol plant in Indiana, this time in Delaware County:
http://www.insideindianabusiness.com/newsitem.asp?ID=19654
6. Sep 17, 06 08:35 PM | Norm said:
Actually, the used mash can be also be used as animal feed. One of the truly useful effects of E85 ... is that it has a tendency to drive down the price (gouging) of gas. While it doesn't give you the mileage gasoline does ... it burns far better than water.
7. Oct 5, 06 08:48 PM | Jim Minatel said:
The mitigating factors that CR fails to mention are:
1. E85 fuel efficiency should improve over the coming years as the automakers get more experience tuning engines for it and make larger investments in it
2. The cost of the grain that everyone is assuming will go up with demand for E85 can be offset by phasing out farm subsidies for idling fields. The policy of paying farmers not to farm can be done away with and we'll have enough inexpensive grain for both fuel and food.
3. The cost of making E85 should come down as operations scale up
4. Even if the cost doesn't come down substantially and the relative cost per mile stays higher than pure gas is now, E85 will probably still be cheaper than gas 5-10 years from now when we face a worldwide oil shortage due to growing demand in India and China. $100 a barrel oil is coming soon along with $5/gal gas. E85 will stay cheaper than that.
5. Grain is renewable. If the world has a 50-100 year supply of oil left and the US is using a disproportionate amount of that, even if we could move to saving just half of our auto gas usage through E85 10 years from now, that would be a huge boon to stretching the the oil supply another decade or two, averting oil wars, and giving us time to develop better alternatives.
It may only be a stopgap, but it looks like a very good stopgap for the foreseeable future.
8. Oct 9, 06 06:08 PM | puneet said:
i like Jim's reply! that's what i need to know for my Bio project. and true, though we may just be breaking even now, people should understand that the gov't is only trying to make it sound like there's nothing in the E85 prospect or that it's not all it's cracked out to be because they want your money. but in the long run, well certainly oil wont be getting any cheaper.
9. May 30, 07 02:42 PM | Ralph Taylor said:
I like Jim's comments and add a few.
The talk of the government subsidy for Ethanol does not figure in our foreign aid for oil producing countries or our military aid.
The Ethanol efficiency does not have much research going into it now. How many Engieering schools are changing their pertoleum engineering degree to be more supportive of Ethanol.
With research effieinecs are improved. A major cost for Ethanol is that it can not be shipped via pipleines. Some reserach needs to be done on this issue.
Also with an infrastrucutre for Ethanol, corn based, it should give rise to the celluistic ethanol from switchgrass.
And we are not sending our money outside the coountry but helping our own citizens.
10. Jul 16, 07 04:36 PM | J. Anderson said:
At an energy form in Utah we were told that a minimum of twelve gallons and as much as thirty gallons of water would be consummed to make one gallon of ethanol. The water is used in the biomass and cooling processes.
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