Illinois River Energy - Products - Ethanol - Ethanol FAQ
Ethanol FAQ Common Questions and Answers about Fuel Ethanol Production and Use What is Ethanol? Ethanol is both an alcoholic beverage and a fuel. It is produced when common yeast (the same yeast used for baking bread or making beer) are fed any carbohydrate feedstock. These feedstocks are most commonly fruit, grains, or vegetables. In the United States (US), ethanol for fuel is most typically produced from corn grain. The resulting ethanol is “denatured”, rendered unfit for human consumption, by adding a small amount (less than 5%) of gasoline to produce fuel ethanol. This prevents the fuel from being taxed or misused as a beverage.
Most commonly, ethanol is used as a fuel additive or “oxygen source” at levels up to 10% in gasoline (E10). Ethanol provides for a cleaner burning fuel. All motor vehicles sold within the US can use E10 and it is broadly available. Ethanol can also be used as a fuel at levels of up to 85% ethanol blended with gasoline (E85). Using E85 fuel requires a flexible fuel vehicle (FFV) that has a special sensor to detect the higher oxygen content of the fuel and other minor modifications. An FFV gives the consumer the freedom to choose – they can utilize gasoline or gasoline containing up to 85% ethanol. A list of these vehicles and retail outlets selling E85 can be found at www.E85Fuels.com.
You will not see a mileage penalty when you use E10. You will see a mileage penalty when you use E85. This is because all vehicles sold in the US are optimized for gasoline, not ethanol. In Brazil, for example, the Saab 9-5, specifically designed to run on ethanol, offsets this mileage penalty. Reference: Renewable Fuels Association Two scientific studies comparing E10 versus unleaded gasoline reported similar results between the two fuels. In the most recent study, mileage results in two of the three vehicles tested showed a slight E10 mileage penalty, while another study suggested there was no difference. Specifically, with a 2005 Chevy Impala, E10 achieved 27.43 mpg and unleaded gasoline achieved 27.71 mpg. With a 2005 Toyota Camry, E10 and unleaded gasoline both obtained 31.46 mpg. Reference: Fuel Economy Study: Comparing the Performance and Cost of Various Ethanol Blends and Standard Unleaded Gasoline, American Coalition for Ethanol When utilizing E85 versus E10 or unleaded gasoline, a mileage penalty of approximately 15-20% is observed. As ethanol is often less expensive than gasoline, frequently, E85 can be priced at a sufficient discount to offset this mileage penalty. Reference: US Department of Energy, Energy Efficiency and Renewable Energy, Energy, Alternative Fuels Data Center
The production of ethanol from corn can be accomplished by one of two separate production methods: wet mill or dry grind. In both cases, corn starch is broken down into sugar for conversion to ethanol. In the wet mill process, the starch is separated prior to conversion. In the dry grind process, the starch is processed with no separation. Today, all new plant construction uses dry grind technology.
From grinding the corn to isolating the ethanol takes roughly 40-45 hours.
A dry grind fuel ethanol facility produces ethanol, carbon dioxide (which can be sold to the carbonated beverage industry), and distillers dried grain with solubles (DDGS) – an animal feed product.
Typically, a 100 million gallon per year (MGY) ethanol plant will require 40-60 acres for the plant itself and outbuildings. However, frequently new plants are constructed on more than 200 acres to allow adequate room for sufficient rail capacity.
A 100 MGY ethanol plant uses approximately 40 million bushels of field corn annually.
Typically, the corn basis in the geography surrounding an ethanol plant increases by $0.05 per bushel
An ethanol plant is like a small brewery or large corn milling plant. There are no noxious or toxic odors from an ethanol plant using modern construction technology. The Environmental Protection Agency (EPA) and the respective state agencies requires that all ethanol plants use a technology, a thermal oxidizer, that burns all of the volatile organic vapors resulting from beer fermentation and from drying the remaining spent corn grain. If there is any odor, it is will be similar to that of toasted grain or bread baking.
An ethanol plant is required to obtain permits for any anticipated or potential release into the environment. These permits set requirements for any emissions from the plant. They must be approved by the state regulatory agency. Additionally, each state ensures ongoing compliance by reviewing annual emissions documentation.
Modern ethanol plants are efficient water users and have no process water discharge. Thus, the only water discharge from the facility is potentially water that has been utilized to provide cooling of the production process. This water has never been in contact with the production process and is similar to the water exiting an air conditioning system. Municipal waste is generated consistent with any other business employing 40 people.
A typical ethanol plant utilizes approximately 3 gallons of water for every gallon of ethanol produced. It takes 88 gallons of water to produce a gallon of gasoline, 48 gallons to process one gallon of beer for beverage consumption, 24 gallons of water to make one pound of plastic, 9.3 gallons of water to process one can of fruit or vegetables, 39,090 gallons of water to produce one new car, 150 gallons to produce a Sunday newspaper. National Corn Growers Association
The majority of the plant operation is converting corn to beer. Because ethanol is flammable, the final step in the process, removing the water from the beer, is conducted in an explosion proof area. Like all cereal or corn processing, care must be taken when drying the spent grains to prevent fire. Extensive safety policies, procedures and training are in place at all ethanol plants.
Currently, ethanol is transported via railcar and truck tanker as existing pipeline infrastructure is not in place to allow for the transport of ethanol. Numerous studies are underway to develop this capability.
Reference: Ethanol: Briefing Report on its Use in Gasoline, Sarah Armstrong, Cambridge Environmental Inc.
According to AUS Consultants, a 50 MGY ethanol plant provides a one time boost to the local economy during construction and a sustained economic benefit to the community in which it operates. For a 50 MGY plant, construction over a one year period provides $142M in incremental revenue. Building and equipping the plant typically utilize over $60M of local goods and services. Once operating, $47M is spent by the plant annually for local goods and services. An additional $29.7M in household income is produced and new tax revenues for the state and local governments of $1.2M are generated. Reference: John Urbanchuk, AUS Consultants, February 2006
The use of ethanol has contributed to reducing undesirable automotive tailpipe emissions. Ethanol-blended fuels reduced carbon dioxide equivalent greenhouse gas emissions by 7.8 million tons in 2005, equal to removing 1.18M cars from the road. Ethanol blended with gasoline at the 10% level (E10) reduces tailpipe fine particulate matter emissions by 50% and carbon monoxide emissions by up to 30%. Reference: Dr. Michael Wang, Argonne National Laboratory; Smog Reyes Air Quality Consultants “Oxygenates like ethanol help fuels burn more completely, thereby reducing emissions of carbon monoxide, volatile organic compounds, and toxic air emissions. Using ethanol as an additive in gasoline displaces benzene found in conventional gasoline, which reduces emissions of this known carcinogen as well.” Reference: American Lung Association of Metropolitan Chicago
Ethanol has a positive net energy balance, meaning the process of producing ethanol takes less energy than the energy the resulting ethanol provides. This is in contrast to the production of either gasoline or electricity, which use more energy to produce than they provide. A number of studies have been conducted by academic and governmental agencies to determine this energy balance. The United States Department of Agricultures (USDA) determined in a 2001 net energy balance study that for every BTU of energy used in the production of fuel ethanol, 1.67 BTU’s were generated. In contrast, 0.805 BTU’s of gasoline or 0.396 BTU’s of gasoline or electricity would be generated for every BTU of input. Corn and ethanol production efficiencies have continued to improve since this last survey and updated energy balance numbers are being developed. Reference: Dr. Hosein Shapouri; US Department of Agriculture
According to the Renewable Fuels Association there are currently 147 ethanol biorefineries producing approximately 8.5 billion gallons of ethanol a year (BGY). A number of additional plants are currently under construction. Reference: Renewable Fuels Association, Ethanol Biorefinery Locations List, last updated November 27, 2006 Today, this amount of ethanol represents less than 3% of our total transportation fuel use. With continued increases in production and the development of new technologies that make other feedstocks economical for ethanol production, however, the US will be able to significantly increase this number over time – balancing the needs of feed and fuel. Reference: US Department of Energy; RAE Analysis Today, over 60% of our oil is imported with forecasts at 70% by 2025. Slightly less than half of our imported oil is from OPEC (Saudi Arabia, Venezuela, Nigeria, Algeria, Indonesia, Iran, Iraq, Kuwait, Qatar, Libya and the United Arab Emirates). Reference: US Department of Energy US domestic production of oil peaked in the early 1970s, yet US petroleum consumption is expected to rise by 43% by 2025. Reference: Institute for the Analysis of Global Security and US Department of Energy Methyl tert-butyl ether (MTBE) was originally introduced as a fuel additive or “oxygenate” to reduce vehicle emissions and improve air quality. Twenty-five states have now limited or banned the substance because it has been shown to be a possible carcinogen and groundwater contaminant. Today, the only viable alternative to the oxygenate benefits of MTBE is ethanol. Reference: Environmental Protection Agency; http://www.epa.gov/mtbe/
The cost of producing ethanol depends significantly on the price of corn and natural gas; however, in general the net cost of production has historically been $1.00-$2.00/gallon. Reference:USDA’s 2002 Ethanol Cost-of-Production Survey The real cost of oil, including direct and indirect subsidies is estimated at between $5.60 and $15.14 per gallon or $80 to $150 per barrel of oil. Reference: National Defense Council Foundation, Rocky Mountain Institute, Economic Strategic Institute
Present law provides for a partial federal excise tax exemption of 51 cents per gallon of ethanol blended into gasoline. For example, fuel blended with 10 percent ethanol receives a tax credit of 5.1 cents per gallon. Petroleum blenders receive this tax credit. A recent study by the U.S. General Accounting Office found that since 1968 the oil industry has received approximately $150B in tax incentives. By contrast, the ethanol industry has received $11.2B through tax credits and exemptions. Reference: US General Accounting Office
Field corn production has averaged 83M planted acres with a yield of 150 bu/A per year for the past five years. In 2007, 93.6M acres were planted, surpassing the 1944 production high of 90M acres. If all of the incremental acres planted in 2007 over 2006 were utilized for ethanol production over 10B gallons of ethanol could have been produced. Since 1948, corn yields have increased four fold owing to improved agronomic practices and advancements in corn breeding technology. The majority of corn production, 56%, is utilized as an animal feed. In the 2007 crop year, 50.8% of the corn produced in the US was utilized for animal feed, 19.1% for export, 18.3% for ethanol, 4.4% for high fructose corn syrup, and 7.4% for other food and industrial uses. A record amount of corn was exported, 2,250M bushels, a growth in exports of 5%. References: United States Department of Agriculture
The underlying force driving changes in the agricultural industry, along with the economy as a whole, is overall higher energy costs, evidenced by $100 per barrel oil. With rising energy costs, corn and other commodity prices would have to increase. Corn prices have had little to do with rising food costs. Important food items like bread, eggs, and milk have high prices that are largely unrelated to ethanol or corn prices, but correspond to fundamental supply/demand relationships in the world. Reference: Agricultural and Food Policy Center; Texas A&M University – April 2008 When corn is utilized for ethanol production, it remains available for use as a feed as only the starch portion of the kernel is utilized in fuel production. Additionally, the corn oil can be extracted from the corn kernel before processing to meet the growing global demands for vegetable oil. Current and projected corn acres harvested and corn yield per acre as well as current and projected ethanol yield per gallon indicate that there will be no difficulty in ethanol from the corn kernel supplying at least 10% of our gasoline needs with no negative impact on food or feed. Reference: National Corn Grower Association Ethanol yields per acre have increased 25% in the past decade. Credible studies show that with plausible technology developments, biofuels could supply some 30% of global demand in an environmentally responsible manner without affecting food production. Reference: Steven E. Koonin, Chief Scientist for BP, Science, Vol. 331, January 27, 2006
Ethanol produced from fiberous plant materials (biomass) such as corn stalks, wood chips, and fiber is termed cellulosic ethanol. Today, there is no commercially demonstrated technology that can produce cellulosic ethanol cost competitively with gasoline. Cellulosic ethanol, however, holds significant promise for the US to be able to achieve ethanol production volumes of 15 B gallons with corn by ramping up production gradually – in line with corn yield increases. Most experts agree that 36B gallons of total ethanol production will be possible by utilizing biomass feedstocks to complement the volume achievable from corn grain. Reference: US Department of Energy |
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