SUMMARY
INTRODUCTION

ENERGY MYTHS

ENVIRONMENTAL MYTHS

OPEN QUESTIONS AND OVERLOOKED REALITIES

POLICY IMPLICATIONS
APPENDIX


 

 

 

 

OPEN QUESTIONS AND OVERLOOKED REALITIES

THE ETHANOL ILLUSION

For years, presidential candidates wooing Iowa caucus voters have promoted ethanol, a fuel produced from corn, as a homegrown alternative to foreign oil. In his 2006 and 2007 State of the Union addresses, President Bush pointedly endorsed ethanol (and other biofuels—in particular, cellulosic ethanol, made from sources such as agricultural waste) as a key component in reducing our “addiction to oil.” The administration’s commitment of research dollars and federal subsidies has further heightened public interest in ethanol as an alternative to gasoline.

Is all this attention justified? As we have seen in earlier sections, all fuels are not created equal, and the same goes for ethanol. As a plurality of Americans correctly believe, the energy content in ethanol is considerably lower than in gasoline.

Consumer Reports finds that E85 (a blend of 85 percent ethanol and 15 percent gasoline) provides 27 percent less fuel economy than pure gasoline.[31] The drop-off is even more significant with pure ethanol. “Conventional gasoline without ethanol contains about 115,000 Btu in a gallon,” according to the U.S. Energy Information Administration. “Ethanol contains 76,000 Btu in a gallon, or about two-thirds the energy of gasoline.”[32]

 

Undeterred by ethanol’s poor performance relative to gasoline, Congress inserted a provision into the Energy Policy Act of 2005 requiring that by 2012, at least 7.5 billion gallons per year of renewable fuels (chiefly ethanol, but also including biodiesel) be blended into the nation’s fuel supply. Since ethanol contains about one-third less energy than gasoline, the mandated figure should offset roughly 5 billion gallons of gasoline, or the equivalent of 120 million barrels of oil. That’s equal to about nine days’ worth of current imports.

Sources: U.S. Department of Energy, “On the Road to Energy Security: Implementing a Comprehensive Energy Strategy,” August 2006, p. 10; and U.S. Energy Information Administration, “Energy Basics 101,” http://www.eia.doe.gov/basics/energybasics101.html.

 

Because ethanol is so much less efficient than gasoline, the several billion dollars in subsidies that governments annually provides to ethanol R&D and production have done virtually nothing to increase ethanol’s share in our energy mix. Nevertheless, policymakers still champion ethanol as a surrogate for gasoline. The 2005 Energy Policy Act mandates the use of 7.5 billion gallons of renewable and alternative fuels in the U.S. energy supply by 2012. In his 2007 State of the Union address, President Bush proposed increasing that mandate nearly fivefold by 2017.

Interestingly, respondents to the MI/Zogby follow-up survey who were asked about ethanol in the wake of President Bush’s 2007 proposal seemed more confused by the topic than those queried five months before. Whereas 21 percent of initial respondents indicated that they were unsure about the relative energy differences between gasoline and ethanol, that figure grew to 37 percent of respondents in the follow-up survey.

 

ENERGY AND THE ENVIRONMENT: MYTHS AND FACTS

Download PDF (3MB)
Or request a hardcopy

Press Release

MEDIA INQUIRIES:

Clarice Smith
Deputy Director,
Communications
Manhattan Institute
(212) 599-7000

 

 


Copyright The Manhattan Institute 2007