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Biofuels: the Basics

Ethanol, biodiesel and the 'carbohybdrate' economy


“The fuel of the future is going to come from fruit like that sumac out by the road, or from apples, weeds, sawdust – almost anything,” the CEO of the Ford Motor Company told a reporter for the New York Times. “There is fuel in every bit of vegetable matter that can be fermented.”

Those words, which capture the sense of excitement and potential surrounding biofuels today, were actually spoken in 1925 by Henry Ford. Nearly a century ago, the Model-T was designed to run on either gasoline or a corn-based fuel called “ethanol”. Even before that, in 1897, Rudolph Diesel demonstrated that his engine could run on peanut oil. Today, following an eight-decade detour in the petroleum age, biofuels are back – fueled by a powerful combination of advancing technologies, rising environmental concerns, farmer support, and soaring oil prices.

Today, we have a growing understanding of the problems related to petroleum products. Climate change is caused in large part by CO2 emissions, the biggest man-made source of which is transportation. A near-epidemic of asthma is closely linked to diesel exhaust and particulate matter. Oil spills, arctic oil drilling, and strip mining for coal represent other potential environmental problems associated with fossil fuels.

Technology and science have invented ways to make bio-based products less expensive and more adaptable. Currently, bio-based products can be used to replace:
• Gasoline
• Diesel fuel
• Home heating oil
• Plastics (from computer parts to water bottles)
• Textiles
• And much more

The prospect of a society with much greater use of these products is often referred to as either the “bio-based future” or a “carbohydrate economy”. Significant resources are being invested in this future. Biofuels get the most attention, and have the greatest investment; for good reason, the prospect of replacing the black gold that our economy runs on is exciting and potentially lucrative.


All biofuels and bio-based products come from “biomass”, a term that covers all living or recently living biological material which can be used as fuel or for industrial production. Examples include wood, corn, sugarcane, and manure. Biofuels can be separated into three basic categories:

a. Ethanol: primarily used in cars, ethanol is a type of alcohol and is most commonly made from corn or sugarcane. Based on sugars.
b. Biodiesel: a substitute for diesel fuel, which is used mostly in trucks in the US but also in an increasing number of diesel cars. Most commonly made from soybeans. Based on oils.
c. Other biomass: mostly used for generation of electricity or heat. Examples: burning wood chips to boil water and create steam, which spins turbines and creates electricity; collecting methane from manure piles to generate heat or electricity

It is important to distinguish between two major energy needs in North America: transportation and electricity.

Transportation: Cars and trucks run primarily on refined oil, and not on electricity. Although plug-in hybrid cars are in development, the auto fleet will continue to rely on liquid fuels for some time. Biofuels are today’s primary alternatives to oil.
Electricity: Our homes and businesses run on electricity, most of which is generated from coal or nuclear power. Solar power and wind turbines are today’s primary alternatives to coal and nuclear generated power.

While solar power and wind turbines are alternative sources of electricity, these technologies do not reduce our need for transportation fuels.


“There’s enough alcohol in one year’s yield of an acre of potatoes to drive the machinery necessary to cultivate the fields for a hundred years” – Henry Ford, 1925

Ethanol may be in your car right now. All cars can run on a small percentage of ethanol mixed with regular gasoline, and either ethanol or MTBE is often added to promote complete fuel combustion. There are over 5 million “flexible-fuel” cars in the US, capable of running on any combination of gasoline and ethanol, though the majority of them actually just use gasoline. It costs automakers less than $100 extra to make a car flex-fuel.

While there is no perceptible difference driving a flex-fuel car running on ethanol, miles per gallon would be 15% lower.

Brazil is an example: in Brazil, the sugar cane industry is huge. They use it to make ethanol to reduce their dependence on foreign oil. Now most Brazilians drive flexible-fuel cars, and buy whichever fuel is cheaper.

Benefits of Ethanol
1) It can be used in our existing car fleet, added to gasoline at up to 10% of a tank.
2) New cars can run on a 20% mix of ethanol with gas, and only minor changes are required for new cars to run on any mix of ethanol and gasoline, up to 85% ethanol, known as E85.
3) Transport: It can be transported easily and use the same gas stations.
4) Surplus Corn: this is a good use for surplus corn production.
5) Global Warming: the burning of fossil fuels releases CO2, a primary contributor to global warming. Ethanol has the potential to significantly reduce our CO2 emissions.
6) Pollution & related health problems: Ethanol burns cleaner than gasoline, and would reduce problems such as asthma and some cancers.
7) Foreign Relations / Dependence on Foreign Oil: much of our economy relies on continued supplies of oil from countries with unstable governments.
8) “Peak Oil”: Oil is not a renewable resource; it will get increasingly scarce and eventually become too expensive to extract. This concept is known as “Peak Oil”, and while there is much debate about when it will arrive, some analysts believe we may be close to, or already past our peak of oil extraction.

Problems with Ethanol
Most of the problems with ethanol are based on the current main ingredient: corn. Alternative methods are available, but are not yet cost effective.

1) Ethanol is currently made from corn, and the way corn is grown in the US is not sustainable. Corn is often genetically modified, and grown using fossil fuels, synthetic fertilizers and pesticides, which have environmental ramifications.
2) So much energy is used to grow and harvest the corn that ethanol is only marginally efficient.
3) Corn is a commodity, and as such is supported by government subsidies that distort market signals and cause overproduction. This perpetuates poverty overseas, where our surplus crops are dumped at below-cost prices.
4) 100% Ethanol cannot be shipped through existing pipelines, because of its chemical properties.
5) One-fifth of the US corn crop is currently processed into ethanol at 114 biorefineries. To meet Pres. Bush's 2017 target of producing 132 billion liters of ethanol, the entire current US crop would need to be turned into fuel.
6) Each additional acre of corn planted for ethanol uses about 137 pounds of chemical fertilizer, a pound of toxic herbicide, and a considerable amount of water for irrigation.
7) Although Brazil meete 40% of its transportation needs through ethanol, critics warn that farming sugarcane used to produce ethanol encroaches on wildlife habitat, degrades soil and causes pollution when fields are burned.

US industry status
Over the last year, ethanol production has received substantial interest and investment. It has become much higher profile in part due to major investments by Bill Gates, a plug by the president in his State of the Union address, and a major marketing campaign by GM. Of course, the high price of gasoline has helped increase interest in alternatives as well – as the price difference between gasoline and ethanol narrows, demand for ethanol increases. As of June 2006, U.S. ethanol production was 4.9 billion gallons per year. This represents approximately 3.5% of the country’s total gasoline usage (140 billion barrels per year).
• 2005: 4 billion gallons
• 2004: 3.4 billion gallons
• 2003: 2.7 billion gallons

The U.S. government has set a target of 7.5 billion gallons of ethanol by 2012, with some states setting ambitious goals of their own. Minnesota is aiming for ethanol to replace 20% of its gasoline by 2013.

Positive Outlook for Future Ethanol Production: Ethanol from Corn
Ethanol made from corn would be improved if the corn was raised sustainably on mid-size farms, sold through co-ops, processed locally into ethanol and used regionally. This would be more efficient and would help small farmers survive. Encouraging ethanol to develop in this way could be done with incentives that encourage small ethanol plants, with seed money to start cooperatives, and with incentives to promote more farmers growing corn sustainably.

Positive Outlook for Future Ethanol Production:Beyond Corn; Cellulosic Ethanol
Advances in technology will allow us to produce ethanol economically from almost any type of plant material. Cellulose (the most common organic compound on earth, found in all plant fiber, including the leaves, stem and stalks) can be broken down by enzymes into sugars. The sugars can be fermented to make ethanol. The U.S. Department of Energy predicts that by 2010 cellulosic ethanol could be produced for $1.07 a gallon. Advancing this technology however, requires major investment.

The following table illustrates some of the benefits of cellulosic ethanol compared to corn-based ethanol:

Corn-based Ethanol
Cellulosic Ethanol
Relies on conventional food crops, such as corn and sugarcane Uses a wider range of plants, including agricultural waste (corn stalks, wheat straw, waste wood)
20% reduction in carbon emissions relative to gasoline Potential 90%+ reduction in carbon emissions relative to gasoline; may promote beneficial carbon storage in the soil with perennial energy crops, like switchgrass.
Conventional crops require greater use of chemical and water inputs to grow Energy crops require fewer inputs and may be perennial crops, such as grasses, which help prevent soil erosion.
High-value byproducts include animal feed. High value byproducts include a wide variety of chemical products, such as lubricants and plastics, as well as electricity.


• Biodiesel is made from vegetable oil or other natural oils, mostly derived from soy in the US.
• Can also be made from waste vegetable oil – the US Army currently produces biodiesel from used cooking oil.
• Biodiesel contains no petroleum, but it can be blended at any level with petroleum diesel to create a biodiesel blend. It can be used in diesel engines with little or no modifications.
• Biodiesel is available in all 50 states. There are 25 places to buy biodiesel in Massachusetts alone, out of 2300 gas stations.
• Biodiesel is superior to petroleum-based diesel fuel according to most diesel engine mechanics.
• According to the U.S. EPA, biodiesel is less toxic than table salt and more biodegradable than sugar. It has none of the toxic or environmental hazards of fossil-derived diesel fuel.

If you were driving a diesel car – as many people in Europe do – you could just fill up with biodiesel one day, instead of regular diesel. It is actually better for your engine, and it makes your exhaust smell like French fries.

Benefits of Biodiesel
1) In many ways biodiesel works better than diesel. It is better for the engine, better for the environment, and better for human health.
2) As the industry grows it can provide a new income source for farmers, revitalizing rural economies.
3) It is much simpler to make than ethanol, and can be done on a farm scale with soybeans grown on the farm.
4) Replacing diesel with biodiesel also helps reduce smog, ozone, acid rain, cancer & asthma, some of the ills associated with burning petroleum diesel.
5) Biodiesel burns up to 75% cleaner than conventional diesel fuel, substantially reduces carbon monoxide, and eliminates sulphur dioxide emissions. Arguably the largest benefit would be a reduction in greenhouse gases contributing to climate change.

Biodiesel is not perfect, but it is an improvement from petroleum diesel, even when you only consider the usage of these fuels, and not the production. Issues of peak oil, climate change, and geopolitics are the same as mentioned above for gasoline vs. ethanol.

Problems with Biodiesel
There are sustainability issues with growing soybeans, similar to those with corn. There is a risk that increasing biodiesel use would only expand the monocultures already existing today. For example, Brazil has already seen an increase in deforestation as its soybean acreage expands for biodiesel production.

The efficiency of making biodiesel is better than that of ethanol, but it still is not very efficient. Proponents suggest that new methods will increase efficiency, opponents suggest that there is a long way to go.

Like ethanol, there are limits to how much biodiesel can be produced. Land use, water availability and competition with food crops all limit the production levels. It would require a major technological advance for biodiesel to replace all diesel fuel currently used in the US.

US Industry position
Biodiesel production is a much smaller industry than ethanol, although it is growing very quickly. Ethanol has a head start due to its use as a fuel additive to help states comply with the Clean Air Act. Annual biodiesel production was 75 million gallons in 2005, up from 500,000 gallons in 1999 and 30 million gallons in 2004. The biodiesel tax incentive that went into effect January 1, 2005 is helping biodiesel demand to climb even more. The U.S. Energy Bill supports the growth of annual biodiesel production to five billion gallons by 2012.

Positive Outlook for FutureBiodiesel Production
There has been much research demonstrating that vast amounts of usable oil can be harvested from algae. (60 gallons of oil per acre of soy, compared to up to 10,000 gallons of oil per acre of farmed algae) If this technology is perfected and results in a highly efficient source of oil to make into biodiesel, it would rate high for sustainability. Alternatively, steps could be taken to encourage and equip farmers to produce their own oil crops and biodiesel, reducing a costly and unpredictable expense. If production can be kept small-scale though creative incentives, farmers stand to benefit much more from this new market.


This is a topic that is of much debate, and only time will tell the real answer. However, in the short term, there will be more demand for corn & soybeans, and thus higher prices. This has both positive and negative results:
• More money to farmers, and thus less reliance on the subsidy system and fewer farmers going bankrupt.
• Higher prices for corn & soy feed, which will make raising cattle on grass more economically viable.
• Less “dumping” of corn & soy surplus overseas, which distorts trade and perpetuates poverty.

• Higher prices for corn & soy will only encourage farmers to plant even more of it, increasing the impacts on the environment. When a switch to cellulosic technology arrives, the corn farmers could face a price crash from overproduction.
• With more money to be made and big companies already very involved in ethanol production, this may cause more consolidation of farms in fewer hands.

Long term, the picture is quite different once corn is taken out of the equation and cellulosic ethanol emerges:
• A major shift in acreage away from corn to something more sustainable, such as switchgrass, would have large benefits for water quality, energy efficiency, climate change and health.
• One likely negative is the creation of genetically modified crops that are ideal for conversion to ethanol.
• The big question is how long it will take to transition to cellulosic methods of ethanol production.


Biofuels will never be a “silver bullet” solution. The energy problems we face are so large and complex that multiple strategies will be needed. Biofuels, teamed up with efficiency measures and conservation, can be a part of an overall solution. However, in the short time that biofuel crops have been planted aggressively, we have seen a rise in grain prices globally causing hunger and starvation among the world's poor, and increased prices for grain based staples for everyone.

The biggest negative with biodiesel, and with ethanol, may be that it serves as a distraction: it holds out hope that we can build a new supply of renewable fuels, and not have to change our lifestyles or take other steps to reduce demand.


Worldwatch Institute report: Biofuels for Transportation

Natural Resources Defense Council’s biofuels resources:

National Biodiesel Board, General info on biodiesel:

Map of US gas stations selling biodiesel:


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