Ethanol expansion faces challenges

The use of ethanol as fuel has been beneficial to corn producers but the expansion of ethanol production has been very controversial. The Environmental Working Group has been a major critic regarding ethanol production. Last year their website showed 404 headlines that were very negative toward ethanol. Some of the headlines are: Despite its huge flaws, ethanol is holy water in DC, and U.S. farmers plant largest area to corn in 63 years for ethanol use.

Another critic is the ethanol battle is the Grocery Manufacturers Association (GMA). They claim that the increases in food prices in 2007-2008 were a direct result of ethanol expansion. However, only 19 percent of the food price is related to the cost of the commodity. The remaining 81 percent of the cost goes for labor, packaging, transportation, energy, advertising expenditures, depreciation, rent, interest cost, business taxes and profits.

The September 2009 Amber Waves, e-magazine published by the USDA Economic Research Service, has an excellent article written by Paul C. Westcott. The title of this article is Full Throttle U.S. Ethanol Expansion Faces Challenges Down the Road. The full article can be found at http://www.ers.usda.gov/Amberwaves/Septe....

The Energy Independence and Security Act of 2007 called for increased ethanol production. However, according to this article, the easy part of achieving this increased expansion is behind us. The large gains were achieved by picking the low-hanging fruit.

To make larger gains will require new technologies, supporting infrastructures, and greater demand will be needed to for the U.S.'s ambitious mandate to increase biofuel use.

Brazil is the largest producer and ethanol exporter in the world. It utilizes sugar cane for its ethanol production and has several advantages over the U.S. in becoming sustainable. Brazil has a very large amount of land that can be devoted to ethanol production. It has government policies that have promoted the use of ethanol use in light vehicles. There are no light vehicles that run on pure gasoline. Since 1976, has made it mandatory that ethanol be blended with gasoline in the range of 10-22 percent. Since 2007, the mandatory blend is 25 percent ethanol and 75 percent gasoline.

The Brazilian car manufacturing industry began developing flex fuel vehicles in 2003 which can run on ethanol levels ranging from 25-100 percent. The flex vehicles have been a commercial success and in 2009, 93 percent of all light vehicles sold were flex fuel vehicles.

By contrast, in the United States, most motor vehicles are restricted by manufacturers warranties to use gasoline containing no more than 10 percent ethanol which will limit growth in ethanol demand.

The Energy Independence and Security Act of 2007 mandates that renewable fuel supplies to reach to reach 36 billion gallons by 2022 which is nearly 5 times the amount required by 2012 as established by the Energy Policy Act of 2005.

There will be challenges to meet these mandates on both the supply and the demand sides of the energy system. There is research in the U.S. of using alternative crops for ethanol production. Sweet potatoes, cassava, sugar cane, and sweet sorghum have been studied. Sweet sorghum is being studied by Dr. Gene Stevens at the UMC Delta Center at Portageville. In spite of the success of these crops in providing carbohydrates for ethanol production, we are still a long way off for commercial production.

On the supply side much of the increases are supposed to come from the use of cellulosic feedstocks. These would include corn stalks, switchgrass, fast growing trees, and forest residue. For this to be feasible, it would require that prices for these commodities to be sufficient to compensate farmers for the additional costs of collection and handling. There is also an environmental consequence for using crop residues. At present, these residues are returned to the soil or applied to the surface to reduce erosion of the land.

On the demand side, automobile warranties hinder the expansion of more ethanol. For example, the flex fuel vehicles can use fuels of up to 85 percent ethanol. The U.S. Energy Department estimates that there were more than 6 million flex-fuel vehicles as of 2008. This accounts for less than 3 percent of the more than 135 million care and 100 million vans, pickup trucks, and sport utility vehicles in the United States.

Any increase in ethanol consumption will be related to the current economic slowdown and subsequent recovery. Future flue consumption in the U.S. will be related to the size of the economic recovery, rebound in gasoline use, and improvements in fuel efficiency.

Increasing the level of ethanol blends from 10 to 15 percent has been supported by United Laboratories in 2009. They suggest that there is no significant incremental risk of damage to fuel dispensing systems. But this would only amount to a minor contribution for the increase in ethanol consumption. Consumer acceptance would also be required for this change to occur. Many consumers still shy away from the gasoline containing only 10 percent ethanol.

There are many challenges such as research needed to bring about use of cellulosic ethanol and getting the needed infrastructure in place to support the fuel industry. It appears to me that this will be a difficult goal of reaching 36 billion gallons of ethanol by 2022.

University of Missouri Extension programs are open to all.

Dr. Michael R. Milam is an agronomy

specialist and county program director with

University of Missouri

Extension in Dunklin County.