The U.S. Department of Energy via its Office of Energy Efficiency and Renewable Energy (EERE) released numbers on ethanol for 2007 recently and for the alternative fuels crowd the news looks good. In 2007 the US produced 6.87 gallons of ethanol, the lions share of that coming from corn. That is a 34% increase over 2006 ethanol production totals and a good sign that US ethanol production will be able to reach its 2008 goal of 8 billion gallons as set by the Energy Independence and Security Act of 2007’s new Renewable Fuel Standard Energy Independence and Security Act of 2007’s new Renewable Fuel Standard.
With 57 new refineries on schedule to open in the coming years the news of ethanol’s production rate of 423,000 barrels a day comes on the heals of oil prices reaching their new high of $110 per barrel. Gas prices are reflecting the rise in the oil futures market while consumer demand for gasoline has remained stagnant, and some reports actually reflect the slightest of dips in demand as American drivers as a whole are just beginning to curb their driving habits.
Other signs of ethanol’s growing strength in the US is its increased inclusion in gas at the pump. Local stations across the country are posting signs of both promotion and warning of their ethanol fuel blends. Some Shell American stations have increased the ethanol content of their fuel to 20%; leaving some drivers concerned about the effects of so much ethanol on their engine. Many cars that predate 1990 may want to keep away from such blends as their engines are not calibrated to handle ethanol, and the corrosive long term effects of ethanol over time on older engines could be harmful. Motorcycle riders must also be aware of what they put in their tanks as their motors tend to be less advanced and ill-equipped for ethanol usage.
While ethanol is on the rise and in the news, both corn based, algae based, waste based, etc., even at 8 billion barrels for 2008 the average consumer will still only see a modest increase in its exposure. Unless you are living in the bread basket of America or near a refinery many peoples only exposure to ethanol is the news and the signs at their local station. Even with the increase of ethanol so far there is no indication on the market that its influx will do anything to halt or counter the ever increasing price of gasoline.