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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]
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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.
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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.
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