IN A surprise U-turn, members of the United States Senate voted 73-27 last week to abolish a 45-cents-a-gallon subsidy for ethanol from corn (ie, maize) that is used for blending with petrol. They also voted to kill the 54-cents-a-gallon import duty on ethanol from abroad. This is the first time in over three decades that the Senate has challenged the sacrosanct $6 billion-a-year tax break for American corn-growers and ethanol producers.
The federal government started subsidising corn-based ethanol back in the late 1970s?in a bid to wean the country off imported oil. As recently as last December, lawmakers voted to extend the ethanol subsidy for yet another year. Since then, two things have happened to make the politicians change their minds.
First, a broad consensus has now thrown its weight behind the environmentalists? view that using home-grown ethanol?as a replacement for imported oil?squanders far too much energy and water in the process, and is not a particularly good way or reducing greenhouse gases anyway. Indeed, given the intensive use of energy in agribusiness, it is debatable whether replacing petrol with ethanol breaks even in terms of the ?wells-to-wheels? energy consumed, or even produces a net reduction in carbon emission.
Besides, even if America?s entire corn crop were to be devoted to ethanol production, it would still only supply 4% of the country?s oil consumption. So much for the argument that home-grown ethanol offers an answer to America?s dependence on foreign oil.
Second, the food industry has gone noisily public about the way the federal government?s corn subsidies?which have encouraged American farmers to devote more and more of their corn crops to ethanol production?have driven up food prices. Last year, 40% of the corn grown in the United States (some five billion bushels) was used for making ethanol. This summer, corn supplies for animal feed are heading for a 15-year low. As a consequence, corn futures have soared to almost $8 a bushel?twice their price a year ago. Consumers counting the cost at the supermarket checkout now know who to blame.
In America, two ethanol-blends of fuel have been approved for use. The most common by far is E10, a blend of petrol containing up to 10% ethanol. In this case, the ethanol is used simply as an oxygenate (ie, an oxygen-rich additive) to reduce the carbon monoxide produced during combustion and to raise the octane rating of the fuel enough to protect the engine from ?knocking? under load?a condition caused by the air-fuel mixture in the cylinders exploding prematurely instead of burning smoothly. Previously, MTBE (methyl tertiary-butyl ether) was the oxygenate of choice, but fell out of favour in 2004 when it was found to contaminate ground water.
A less-common blend, a fuel containing 85% ethanol and 15% petrol, is known as E85. This exists thanks to a political ploy designed to help motor manufacturers achieve the Corporate Average Fuel Economy (CAFE) requirement for the fleet of vehicles they sell each year. In 2011, the motor industry has to achieve a fleet-wide average of 30.2mpg (7.8 litres/100km) for all the new cars and 24.1mpg for all the light trucks they sell in America. Under the ethanol fudge, so-called ?flex-fuel? vehicles that can run (even if they never do) on E85 as well as petrol are granted a 54% bonus towards their CAFE target. Judging from the limited availability of the blend outside the corn belt, few owners of flex-fuel vehicles ever fill up with E85.
There are good reasons why not. A gallon of pure ethanol contains two-thirds the energy of a gallon of petrol. If a flex-fuel vehicle achieves 30mpg on petrol, switching to ethanol would give it 20mpg. In other words, 50% more fuel is needed to travel the same distance. In having some petrol blended in it, the consumption penalty falls to 25% to 30% when a car is fuelled with E85. On a cost-per-mile basis, ethanol fuels like E85?even with their hefty subsidies?are typically 20% more expensive than petrol. Something similar goes for E10, though the penalty is much less.
Source: http://www.economist.com/blogs/babbage/2011/06/biofuels?fsrc=rss
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