Ethanol Basics

Ethanol Basics

Ethanol is a renewable fuel made from various plant materials, which collectively are called “biomass.” Ethanol contains the same chemical compound (C2H5OH) found in alcoholic beverages. Nearly half of U.S. gasoline contains ethanol in a low-level blend to oxygenate the fuel and reduce air pollution. Ethanol is also increasingly available in E85, an alternative fuel that can be used in flexible fuel vehicles. Studies have estimated that ethanol and other biofuels could replace 30% or more of U.S. gasoline demand by 2030.

Several steps are required to make ethanol available as a vehicle fuel—see the supply chain diagram below. Biomass feedstocks are grown, then various logistical systems are used to collect and transport them to ethanol production facilities. After ethanol is produced at the facilities, a distribution network supplies ethanol-gasoline blends to fueling stations for use by drivers.

Ethanol Benefits

According to the U.S. Department of Energy, Ethanol is a renewable, largely domestic transportation fuel. Whether used in low-level blends, such as E10 (10% ethanol, 90% gasoline), or in E85 (85% ethanol, 15% gasoline), ethanol helps reduce imported oil and greenhouse gas emissions. Its use also supports the U.S. agricultural sector. This page describes the benefits of ethanol. For additional details, visit the U.S. Department of Energy Biomass Program’s Benefits page.
Increasing Energy Security

About two-thirds of U.S. petroleum demand is in the transportation sector. Sixty percent of U.S. petroleum is currently imported. Depending heavily on foreign petroleum supplies puts the United States at risk for trade deficits, supply disruption, and price changes. Ethanol, on the other hand, is almost entirely produced from domestic crops today. Its use, and that of other alternative fuels, can displace a significant amount of imported petroleum.
Fueling the Economy

Ethanol production is a new industry that is creating jobs in rural areas where employment opportunities are needed. The Renewable Fuels Association’s Ethanol Industry Outlook 2009 Report (PDF 4 MB) calculated that in 2008 the ethanol industry added more than $65 billion to gross domestic product and supported the creation of more than 494,000 jobs. A recent report claims there is an economic return on investment of nearly five to one for each dollar spent in the form of the federal tax incentive for ethanol use (PDF 83 KB). Download Adobe Reader. For additional information on the economic benefits of ethanol, see Local Economic Impact of Ethanol Plants (Excel 21 KB) and U.S. Ethanol Plant Ownership and Capacity (Excel 22 KB).

Reducing Greenhouse Gas Emissions

The carbon dioxide released when ethanol is burned is balanced by the carbon dioxide captured when the crops are grown to make ethanol. This differs from petroleum, which is made from plants that grew millions of years ago. According to Argonne National Laboratory, on a life-cycle analysis basis, corn-based ethanol production and use reduces greenhouse gas emissions (GHGs) by up to 52% compared to gasoline production and use. Cellulosic ethanol use could reduce GHGs by as much as 86%. For more information, see the Greenhouse Gas Emissions and Energy Balance sections.

To learn more about fuel economy, GHG scores, and air pollution scores for E85-capable flexible fuel vehicles (FFVs), visit the U.S. Department of Energy/U.S. Environmental Protection Agency’s Fuel Economy Guide.
Providing Convenience, Availability, and Flexibility

Low-level ethanol blends such as E10 already constitute much of the gasoline sold in the United States. Low-level blends require no special fueling equipment and can be used in any gasoline-powered vehicle. E85 fueling equipment is slightly different than petroleum fueling equipment, but the costs are similar. In some cases, it is possible to convert existing petroleum equipment to handle E85. FFVs designed to run on E85 are becoming more common each model year, and FFVs are typically available as standard equipment with little or no incremental cost. Also, because FFVs can be fueled with gasoline as well as E85, drivers have the flexibility to travel outside of areas served by E85 fueling stations.
Protecting the Environment

Ethanol is biodegradable and, if spilled, poses much less of a threat than petroleum to surface and ground water. After the sinking of the Bow Mariner off the Virginia coast in February 2004, U.S. Coast Guard officials noted the cargo of 3.2 million gallons of industrial ethanol had dissipated quickly and did not pose an environmental threat to humans or marine life.

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