Ethanol production a boom or bust?
If we had a reasonable demand for alcohol-blended fuel, investment for producing ethanol and methanol both here in the US and abroad would skyrocket – a significant and world-changing “boom”.
What’s needed is a marketable demand for the fuel. Unfortunately most cars on the road can not use alcohol-blends greater than 20% or so, some of the older cars and equipment like lawn mowers, construction equipment, and boats can’t even use that much of a blend.
There is a technology called “Flex Fuel” that has been around for over 10 years, and is already built-in to some cars sold in the US (about 3% on the road). “Flex Fuel” involves improvements to some of the fuel system components to resist alcohol-corrosion, adding a sensor that can determine how much alcohol is in the fuel going to the fuel injectors, and programming the computer that runs the engine in the car. It costs between $100 to $200 to add these components during production of a new car. All “Flex Fuel” cars can run on regular gas, or any combination of alcohol-and-gas.
So 3% of vehicles can run on alcohol-blends currently. It costs a gas station operator about $60,000 to install the “blending” pump required to distribute the fuel, and possibly much more if they need to upgrade their storage tanks.
Few gas station so far have thought this was a good investment for them to make. 3% of their customers can use it – if they even know their car is capable (not many people know for sure). Not a very impressive market to service.
American automakers have previously promised to build Flex-Fuel technologies into 80% of their new cars starting in the next few years. If they stick to their promises, then a viable alcohol-blended market will start to build. If we could convince foreign makers to build Flex-Fuel vehicles, then a world-market for alcohol-blended fuels will emerge, creating a robust world market for the fuel.
My favorite side-effect of a robust Ethanol and Methanol market is that it would turn places like Africa, Asia, and South America into competitive energy-producing power-houses; using crops like sweet sorghum, sugar cane, and jatropha. We could easily diversify our sources of energy (we don’t have to grow it all ourselves) and at the same time enable some of humanities most needy countries to build viable and renewable energy industries that would ultimately enable local economies to pull themselves out of poverty, build infrastructure, power their own future on alcohol-blends, etc…
Another benefit of a robust market is a huge drop in demand for oil, as alcohol is used to replace up to 85% of the oil currently consumed by transportation. We don’t decimate the oil industry – we will still require oil for some transportation as well as the other products oil is a fantastic raw material for – but we can stop wasting our limited oil supply, sending it out our tailpipes.