Myth 1: Ethanol costs substantially more than gasoline.
There are many studies that have placed the whole cost of ethanol including cost to plant, fertilize, harvest and refine crops; higher than gasoline. There is some truth to the studies but what they fail to consider is the WHOLE cost of gasoline.

Currently oil energy imports represent 40% of our trade deficit. Worse, we are spending this money both directly and indirectly in a way that supports regimes that are hostile America. At the same time we are subsidizing our farmers to keep U.S. agriculture viable; often paying farmers not to grow various crops. Now I don’t know what the added geopolitical cost per gallon of gasoline is but I do know that if we consider these facts it substantially narrows the gap between the cost of ethanol and the cost of gasoline.

Add to this the obvious benefits of CO2 mitigation with renewable energy resources and I think we have a pretty even comparison between gasoline and ethanol.

I personally would rather our farmers profit from our energy demands rather than continue to contribute to a market that underwrites the Mad Mullahs in Iran or U.S. hating communists like Hugo Chavez. Shifting the world energy market to ethanol can solve these problems and make the U.S. a net energy exporter; and this is a good thing.

Myth 2: Every acre in the U.S. will need to be planted in corn to meet our energy needs at the expense of food crops.

Given the data at the time of many of these studies this is somewhat true but technological bioengineering breakthroughs in crop yields have helped and continue to help this problem. The most promising technology, though, is in cellulosic ethanol technology where enzymes are used to break down hard fibers from agricultural wastes and very hearty native grasses into fermentable sugars. This technology is proven and available and only suffers a capital infrastructure disadvantage to gasoline and conventional ethanol. Once this is overcome spinning gold from straw will become as common as an every week fill-up at the local service station.

Myth 3: Ethanol has a substantially lower energy yield than gasoline.

This is a myth I really hear often so it deserves a good bit of attention. It is true that the potential energy yield of a gallon of gasoline is higher than a gallon of ethanol. Most of the figures I’ve seen give gasoline about a 20% advantage. The problem with this statistic, however, is that the conventional internal combustion engine is unable to consume all of the energy that is available in a gallon of gasoline. Even in the most efficient engines we have today pump gasoline begins a process of pre-ignition or detonation when compression ratios get much higher than 9 to 1. This detonation occurs when the air and fuel mixture explodes prematurely in the combustion chamber and this limits the amount of energy we can derive from a gallon of gas. Under the same compression ratio ethanol has a lower energy yield than gasoline but at higher compressions (around 13:1) ethanol has a comparable energy yield without the problem of detonation. Our current generation of flex-fuel vehicles that burn both gasoline and ethanol are limited to the least common denominator of the lower compression. Once E85 ethanol blends are readily available across the country, however, cars manufactured specifically for this blend will get comparable mileage/performance.

Myth 4: Transportation infrastructure inadequate.

Again, in order to compare apples to apples we must consider the capital infrastructure advantage that gasoline has over ethanol. It is true that the corrosive nature of ethanol prevents it from being transported in the existing pipe-line network. Is it a fair to use gasoline’s existing playing field as a benchmark against one that has yet to be built for ethanol? If the other advantages merit a shift to ethanol as our primary transportation fuel source then shouldn’t the one-time capital infrastructure costs of transportation be negated in comparison to gasoline?

In any case it does not make sense to think of ethanol with the same centralized distribution network. Ethanol lends itself to a smaller distributed network where small immediately adjacent rural areas feed the urban areas next door. This has the further advantage of economic development and self sustainability of communities that many times rely on the welfare resources of urban economies. Ethanol can allow us to target depressed rural areas where unemployment is high with useful industry rather than health and human services handouts.

In summary…
Although I disagree with production mandates and certain tariffs that tend to cause vast price fluctuation and inflation of ethanol costs, I do believe that we should index the cost of gasoline to its real geopolitical and environmental costs. If we’re going to fight a war every decade or so to protect world oil interests, this cost should show up in the price at the pump. When it does, ethanol will quickly become a very appealing alternative. I also think it is important to protect our fledgling ethanol industry and certainly invest in cellulosic research but eliminating the sugar tariffs and encouraging open trade across the Americas in sugar is also a step in the right direction at least in the short term.