A few ethanol facts…

By Matt Reese

There are plenty of good-natured (and sometimes not-so-good-natured) debates within agriculture. In the current climate of jaw-dropping fuel prices and skyrocketing corn prices, though, few discussions generate stronger feelings within agricultural circles than ethanol. 

President Joe Biden recently announced that the Environmental Protection Agency is planning to allow E15 gasoline to be sold this summer through an emergency waiver as part of a broader plan to address soaring fuel costs. Ethanol proponents, of course, are pushing for much more, suggesting that bumping up a third of the nation’s fuel supply from 10% to 15% ethanol would help lower prices at the pump, address air quality concerns and replace oil previously imported from Russia. Ethanol opponents have come forth with the typical concerns.

Here are some facts from both sides of the debate to consider as ethanol discussions are sure to continue in 2022.

• At current prices, E15 can save about 10 cents per gallon of gas on average, and many stations sell E15 at an even greater discount. 

• Most people see a decrease in fuel economy when running their vehicle on blends with higher ethanol content, such as E85 (which I often use in the flex-fuel car I drive). The decrease in miles per gallon varies based on a number of factors, but it can range from a slight decrease to as much as 25%. The cost of E85 at the pump is rarely anywhere close to a 25% discount so it is often actually higher in per mile cost compared to E10 (standard gasoline mix), even though the fill-up costs less.

• The decrease in fuel economy is due to a lower energy content per gallon of ethanol than gasoline. E85 also burns faster than regular gasoline because it vaporizes more quickly. 

• The USDA estimates 2020-’21 corn use for ethanol at 5.035 billion bushels. U.S. corn growers produced 15.1 billion bushels in 2021.

• With a finite global land supply for crop production and a tight global corn supply, it is often argued that corn (especially when supplies are tight) should be reserved for uses including food and livestock feed, not fuel. But if corn is not used for ethanol to relieve supply pressure for corn when supplies are tight, at what point would the resulting corn surplus then be permitted for use in ethanol production? 

• Ethanol production results in dried distillers grains with solubles (DDGS), which offsets the need to use corn for livestock feed. One bushel of corn produces 2.8 gallons of ethanol as well as 17 to 18 pounds of DDGS which can be fed to livestock. A metric ton of DDGS can replace, on average, 1.22 metric tons of feed consisting of corn and soybean meal.

• We have oil, a bunch of it. Why don’t we use that for our energy? Please see an environmentalist on this one.

• Ethanol-gasoline mixtures do burn cleaner and have higher octane levels than pure gasoline, but they also have higher evaporative emissions from fuel tanks and dispensing equipment. 

• The current reality is that a large amount of oil is imported into the United States from other countries. Ethanol is produced domestically with a renewable crop.

• High corn prices (driven by many factors including ethanol use) make livestock and poultry feed expensive, which hurts the bottom line of those farm operations. On the flip side, though, nearly every input cost for corn production is also very high right now.

• I have a chainsaw that can attest to the fact that ethanol is not a good idea for use in some engines.

• By expanding the supply, ethanol does lower fuel costs. Lower fuel costs likely have more of an impact on the price of food (due to shipping costs) than increases in the price of corn, which accounts for about 8 cents of the current price of a $4 box of corn flakes.

• (From the Congressional Research Service) The Renewable Fuel Standard (RFS) requires U.S. transportation fuel to contain a minimum volume of renewable fuel each year. The RFS began with requiring 4 billion gallons of renewable fuel in 2006 and was scheduled to ascend to 36 billion gallons in 2022. Since 2014, the total renewable fuel statutory target has not been met with the advanced biofuel portion falling below the statutory target since 2015. Some folks just do not like these government mandates, and I can understand that. 

• (From the Renewable Fuels Association) As is currently the case, there is no specific requirement for corn ethanol in the RFS provisions for years after 2022. It is a common misconception that the current RFS specifically requires the use of corn ethanol. In reality, there is no requirement to use corn ethanol to meet RFS obligations. Rather, corn ethanol is just one of many “renewable fuels” that may be used to meet the undifferentiated volumetric requirements of the RFS — which are limited to 15 billion gallons beginning in 2015. The statute does not contain specific criteria for setting volume requirements for “undifferentiated renewable fuel” post-2022. 

• The U.S. Energy Information Administration currently expects U.S. ethanol production to average 1.03 million barrels per day in 2022, up from a U.S. ethanol production average of 980,000 barrels per day in 2021. 

• There are cleaner fuel possibilities in the future. Ethanol is a cleaner fuel reality right now.