Ethanol: Missing the Bigger Picture

By: Christopher Forestieri

Ethanol has played a big part in the news cycle over the last few years, with many viewing them as a sure way to eliminate our dependence on foreign oil. Much of its support is a result of lobbying by the agricultural community seeking subsidies for corn or other crops which can be converted into “flex fuel.”

Like any movement, the “ethanol revolution” has met resistance. Many environmental groups have been quick to point out the problems associated with using a food source for fuel, such as its effects on soil quality. There is also growing evidence that agricultural based fuel is responsible for a portion of the rise in food costs.

But aside from ethanol’s residual effects, there is one main reason ethanol is not a solution to our energy problem: It cannot replace a barrel of oil.

According to Robert Bryce, in a recent article on Slate.com (http://www.slate.com/id/2202314), “When it is refined, a barrel of crude yields several different "cuts" that range from light products, such as butane, to heavy products, such as asphalt. Even the best-quality barrel of crude (42 gallons) yields only about 20 gallons of gasoline. Furthermore, certain types of crude oil (such as light sweet) are better suited to gasoline or diesel production than others. The overall point is that even the most technologically advanced oil refineries cannot produce just one product from a barrel of crude—they must produce several, and the market value of those various cuts is constantly changing.”

Ethanol only replaces one part of what we get from a barrel of oil. In doing so it fails to address the growing demand for the other parts.

Bryce notes, “the problem for the ethanol advocates is that there's very little growth in gasoline demand, while the demand for other cuts of the barrel is booming. In short, the corn ethanol producers are making the wrong type of fuel at the wrong time. They are producing fuel that displaces gasoline at a time when gasoline demand—both in the United States and globally—is essentially flat. Meanwhile, demand for the segment of the crude barrel known as middle distillates—primarily diesel fuel and jet fuel—is growing rapidly. And corn ethanol cannot replace diesel or jet fuel, the liquids that propel the vast majority of our commercial transportation machinery.”

I had never really considered the overreaching use of crude oil. There has been such emphasis on replacing gasoline for travel, that many, myself included, have neglected the other uses for crude oil, and thus the need to replace those as well.

Ethanol subsidies do more to boost the economy of agricultural communities than to reduce our carbon footprint or our nation’s dependence on foreign oil. In fact, they may even cause the price of oil to rise. Bryce quotes an anonymous executive of a domestic oil refiner as saying, “ethanol is making diesel more expensive relative to gasoline because it's expanding the pool of gasoline. But to make diesel, we have to process more crude, which in turn is raising the price of crude.”

The real question is why lawmakers have put all of their efforts (and our tax dollars) into addressing only part of the problem, if they do indeed have our nation’s best interests in mind. Bryce’s article makes some thought provoking points and asks some extremely relevant questions, I would recommend it to anyone interested in the alternative fuels debate.

The point is, until we start to examine completely phasing out crude oil, we are essentially wasting time and money. As Bryce puts it, “ethanol is doing absolutely nothing to reduce overall U.S. oil consumption or imports because refiners have to buy the same amount of crude (or more) in order to meet the demand for products other than gasoline—that is, jet fuel, diesel fuel, fuel oil, asphalt, etc.”