Bottom Line Economics on Ethanol and Gas

Boy there sure are a lot of ethanol and biodiesel plants going up around here aren't there? If one listens to a lot of politicians on both sides of the aisle, ethanol is going to allow us to replace our dependence on foreign oil and maintain our current way of life with a few small adjustments to our existing vehicles. Well, that's just a load of crap and here are the numbers.

I'm using statistics provided by Robert Rapier, a Wyoming-based chemical engineer who works in the oil industry. He outlines everything and provides sources in this post at The Oil Drum, a blog that concerns itself with peak oil and sustainability issues. I have verified all the studies and all are from government estimates and the current scholarly consensus as best as I can determine.

• Gross U.S. Corn Production (2005): 10.35 bushels - 1.95 billion bushels sold abroad = 8.4 billion bushels


• Gallons of ethanol produced per bushel of corn: 2.7


• Gallons of ethanol produced per year from entire US corn supply: 22.68 billion

My bottom-line figures differ from his a bit because I make the irrational assumption that we might still want to keep a couple of billion bushels of corn to exchange for hard currency; or even God forbid, food production. But high fructose corn syrup is going to get a whole lot more expensive. Wonder what the soft drink companies will have to say about this? Never mind, on to the rest of the numbers...

• BTU equivalent of a gallon of ethanol to a gallon of gasoline: 67%


• Gasoline equivalent of annual ethanol production from entire US corn supply: 15.19 billion gallons


• Annual US domestic gasoline demand (2005): 140 billion gallons




---



• Total percentage of US gasoline demand displaced by converting entire domestic corn crop to ethanol: 10.8%

Conclusion: Converting the entire domestically used US corn crop and converting it to ethanol and adding it to gasoline to produce E85 fuel would only cover about two thirds of the current US demand for gas.

And we haven't even gotten into the thorny details of all the petroleum-based inputs that go into producing corn. From shipping seedd to farm, planting, fertilizing (and fetilizer) to harvest, transport to ethanol plant, production and distribution of ethanol products everything is driven by gas, diesel and petroleum products. In other words, with the current energy economy we only get about break even or perhaps 30% more net energy out of a gallon of ethanol than we put into making it. This is called the energy return on energy investment or EROEI ratio. EROEI ratio for oil? Depending on how hard it is to get out of the ground, how far away etc. it is between 20 and 100.

As Rapier says in a different post:

There are even some places in the U.S. where ethanol could provide a (mildly) sustainable solution even as it is produced today. Take Iowa, for instance. Iowa has good corn yields and doesn't require irrigation. If the ethanol is produced from local corn, and is used locally (not shipped halfway across the country), the renewable portion of ethanol is increased. This may provide marginal mitigation for peak oil in certain local areas (though it is still not a highly efficient way to produce fuel). But get into areas outside the Midwest, where you have to ship corn a long way, ship ethanol a long way, and/or irrigate the corn, and ethanol rapidly becomes just a recycled fossil fuel.