Fuel ethanol has a long history in the United States and is used extensively as a gasoline volume extender, octane booster, and oxygenate. However, most ethanol is currently made from corn and the process involved has matured to the point that further significant declines in production costs seem unlikely. Ethanol's economic viability as a gasoline blending component also depends in part on Federal and States subsidies, and the Federal subsidy (54 cents per gallon) is slated for slow reduction over the next few years and expiration at the end of
2007.
Ethanol's future might therefore depend on the development of more efficient production technologies. According to the Energy Information Administration's Outlook for Biomass Ethanol Production and Demand, exploitation of technologies that replace corn with cellulosic feedstocks - agricultural and forestry wastes, grasses, and certain components of municipal waste, for example - could sharply reduce production costs. Cellulosic ethanol has environmental advantages over corn-based ethanol as well, because its energy balance (the difference between the energy in a gallon of ethanol and the energy required to make that gallon) is significantly higher. On a fuel-cycle basis, this leads to reduced per-mile vehicle emissions of greenhouse gases when the ethanol is blended into vehicle fuel with gasoline.
The report discusses projections of potential biomass ethanol production under three scenarios: a reference case, a low-technology case, and a high-technology case. The reference case assumes use of countercurrent hydrolysis technology and savings of $0.30 per gallon by 2015 (1998 dollars). In the low-technology case, ethanol is produced from cellulose using sulfuric acid hydrolysis, and process improvements are assumed to yield production cost savings of $0.16 per gallon by 2015. Enzymatic hydrolysis characterizes the high-technology case; cost savings are assumed to reach $0.60 per gallon.
If the Federal subsidy is extended through 2020, the reference case projects an annual increase in ethanol production of 1.4 percent from 2000 through 2020, with total production reaching 850 million gallons in 2020 (see figure). In the low-technology case, production rises only to 347 million gallons by the end of the forecast period. The high-technology projection is for annual production growth of 30 percent and total production of 2.8 billion gallons in 2020.
The report briefly recounts the historical uses of ethanol in the United States, describes the various technologies involved in the three projection scenarios, and considers the effects on ethanol production if the Federal subsidy were allowed to expire at the end of 2007.
Outlook for Biomass Ethanol Production and Demand is available only via the Internet.
If you are having technical problems with this site, please contact the EIA Webmaster at webmaster@eia.doe.gov or call 202-586-8959. For general information about energy, contact the National Energy Information Center at 202-586-8800 or infoctr@eia.doe.gov.
URL: http://www.eia.doe.gov/emeu/plugs/plbioeth.html
File last modified: April 25, 2000