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Ethanol Facts

Is there enough corn to meet the demand for ethanol?

Recent USDA reports show that in the year 2008, it is anticipated that the U.S. will produce the second largest corn crop in history — trailing only last year’s record-setting crop. The USDA estimates that more than 12.3 billion bushels will be harvested in 2008 and corn supply for the U.S. will be about 13.6 billion bushels when a 1.3 billion bushel carry-in gets added to overall production for the year. Last year, ethanol accounted for about 22 percent of the total corn demand for 2007, while feed remained in highest demand at 42 percent. The U.S. is still the largest exporter of corn in the world with about 17 percent of the overall corn supply being exported to foreign markets. Projections for surplus continue to exceed 1 billion bushels, or roughly 10 percent of the overall supply. The National Corn Growers Association (NCGA) projects that ethanol demand and corn supply will continue on an even trend in the coming years because of increased corn yields through genetic improvements. On average, corn yields have increased by 3.5 bushels per acre per year since 1995. Based on historical data, the NCGA predicts corn yields to increase to around 180 bushels per acre by 2015 compared to the 150 bushels per acre in 2006. For 2008, the USDA projections have corn yields exceeding 155 bushels per acre. At 180 bushels per acre, ethanol production will increase to over 20 billion gallons of ethanol without adding another acre to corn production. Hybrid yields are currently producing up to 280 bushels per acre, or enough corn to supply over 36 billion gallons of ethanol production.

See Also:
* U.S. Corn Growers: Producing Food AND Fuel (
* Corn and Ethanol: Green, Getting Greener (
* 2007 Corn Yield Contest National Winners (

Why even bother with corn ethanol? Isn't cellulosic really the future?

Corn-based ethanol is clearly the growth engine for U.S.-based ethanol production today and for years into the future. Cellulose technology production is progressing, but still 3-5 years away from being commercially viable. The Energy Independence and Security Act of 2007 established an expanded Renewable Fuels Standard that includes a cellulosic ethanol requirement of 100 million gallons by 2010, increasing to 3 billion gallons by 2015. By 2022, the cellulosic ethanol requirement is set at 16 billion gallons of the overall 36 billion gallons of renewable fuels.

See Also:
* Biomass as Feedstock for a Bioenergy and Bioproducts Industry: The Technical Feasibility of a Billion-Ton Annual Supply (
* RFA: Cellulosic Ethanol (

Will the ethanol industry oversupply the current market?

The Energy Information Association (EIA) estimated that the U.S. gasoline market will grow from approximately 142 billion gallons per year today to 149 billion gallons of gasoline by 2015. A 10 percent blend rate in the total U.S. gasoline supply would require 14.2 billion gallons annually for today's market, growing to 14.9 billion gallons by 2015. The National Ethanol Vehicle Coalition (NEVC) currently estimates that there are about 7 million Flexible Fuel Vehicles (FFVs) on the road today. The nation’s Big Three Auto manufacturers (General Motors, Ford and Chrysler) each pledged that by 2015, half of their vehicles in production will be FFVs. Given those estimates and projecting each FFV to use, on average, 600 gallons per year, the potential ethanol market would need to increase by 11 billion gallons to nearly 30 billion gallons by the year 2015 to meet FFV demand and achieve a 10 percent blend in our nation's gasoline supply. The current RFS requirement for ethanol by 2015 is at least 18 billion gallons of ethanol.

See Also:
* Annual Energy Outlook 2008 with Projections to 2030: Issues in Focus (

Is ethanol responsible for higher food prices?

Coinciding with growing ethanol demand, prices Americans are paying for food has also risen. However, numerous statistical analyses have proven that the price of oil — not corn prices or ethanol production — has the greatest impact on consumer food prices. Based on a study completed by the Nebraska Corn Board, the average food product travels 1,500 miles to reach the food shelf, which equates to about $881.25 in diesel at $4.00/gallon. That equates to $.21 per box of cornflakes with 4,200 boxes on board, with only $.07 worth of corn in each box. A December 2007 report from Informa Economics definitively demonstrates that the role of corn prices and ethanol production in rising food prices is minimal at best. The report notes that packaging, processing, labor and other activities unrelated to agricultural products have the most impact on consumer food prices.

See Also:
* RFA: Ethanol Industry Outlook (
* Nebraska Corn Board (
* U.S. Corn Growers: Producing Food AND Fuel (

Will ethanol create a shortage of corn needed to feed the world's population?

According to the National Corn Growers Association (NCGA), the U.S. continues to serve as the world's top exporter of corn despite the continued growth of the ethanol industry. In fact, more than 40 percent of the corn grown in the U.S. is still used as livestock feed, while less than 10 percent of the crop is used in items for human consumption. The majority of the U.S. corn exported is used to feed livestock in developed countries.

See Also:
* National Corn Growers Association (

Can ethanol really impact American imports?

According to the Renewable Fuels Association, by the end of 2008 the ethanol industry is poised to have a production capacity of more than 12 billion gallons — enough capacity to displace oil imports from any OPEC nation, including Saudi Arabia. Refiners use ethanol as a valuable source for octane which allows refiners to produce sub-octane fuel and improve their yield of gasoline and then blend ethanol to make finish-grade gasoline. Clearly the ethanol industry will reduce our nation's requirement to import gasoline.

See Also:
* Annual Energy Outlook 2007 with Projections to 2030: Market Drivers (

Don't corn farmers and ethanol producers benefit the most from ethanol?

While it is true that increased corn prices and farmer investment in ethanol production facilities have helped the economies of rural America, the ethanol industry has had a major impact on other areas of the American economy. According to a January 2008 study done by the Renewable Fuels Association, the effect of the Renewable Fuels Standard will add $1.7 trillion to the Gross Domestic Product, generate an additional $436 billion in household income for all Americans, create 1.1 million new jobs in all sectors of the economy, and generate $208 billion in new federal tax receipts, all between 2008 and 2022. Moreover, the production of ethanol put an additional $12.3 billion into the pockets of American consumers in 2007.

See Also:
* Contribution of the Ethanol Industry to the Economy of the United States (
* RFA: Ethanol Industry Outlook (
* RFA: Renewable Fuels Standard (

Doesn't it take more energy to produce ethanol than it yields?

There have been nine different groups that have studied the energy balance issue over the years and eight of the nine concluded that ethanol produces a positive energy balance. A few have published multiple reports that show ethanol energy yield continues to increase as farming practices improve and ethanol production facilities incorporate the latest in technology. The USDA, working with Argonne National Labs, concluded that ethanol yields a 34 percent BTU improvement. More importantly, the study showed that for every BTU of liquid fossil fuel used (primarily in farming and transportation to the ethanol facility), ethanol provides a six times BTU extension of our liquid fossil fuels.

See Also:
* The Energy Balance of Corn Ethanol: An Update (
* Comparative Results of Ethanol Energy Balance Studies 1995-2005 (

Aren't government subsidies supporting ethanol production today?

The Blender’s Tax Credit, the 51 cents per gallon tax credit, is paid to the petroleum industry as an incentive to blend ethanol into their gasoline. The blender’s credit was put in place to support the infrastructure investments that refiners make to blend ethanol. To prevent U.S. tax dollars from providing additional subsidies to foreign-produced ethanol, there is a secondary duty of 54 cents per gallon that was created to offset the value of the ethanol tax credit. According to the Renewable Fuels Association, the ethanol industry more than paid for itself in 2007. The combination of increased GDP and higher household income generated an estimated $4.6 billion in tax revenue for the federal government and nearly $3.6 billion of additional tax revenue for state and local governments. Assuming that all of the 6.5 billion gallons produced during 2007 were marketed, the estimated cost of the two major federal incentives in 2007, the VEETC and the Small Ethanol Producer Tax Credit totaled $3.4 billion. Consequently, the ethanol industry generated a surplus of $1.2 billion for the federal treasury.

See Also:
* ACE: Federal Legislation (
* RFA: Reports & Studies (
* RFA: Ethanol Facts: Economy (

E85 sounds good. Are there enough FlexFuel Vehicles (FFVs) and fueling locations?

E85 sounds good. Are there enough FlexFuel Vehicles (FFVs) and fueling locations? As of July 2008, the number of Flexible Fuel Vehicles on America’s roads exceeds 7 million according to the National Ethanol Vehicle Coalition (NEVC). This is an 800,000 increase over the past year. The NEVC also estimates that approximately 2 million more FFVs will be produced each year and that our nation currently supports more than 1,600 stations offering E85, a blend of 85 percent ethanol and 15 percent gasoline. The number of E85 fueling locations in the U.S. has increased tremendously since 2006 when there were less than 750 E85 stations. The number of E85 stations continues to increase as more ethanol production comes on-line. E85 contains approximately 73 percent of the energy in gasoline, according to the Ethanol Promotion and Information Council. Pure ethanol has an octane rating of 113 and when mixed with 15 percent gasoline, the octane rating of E85 is still over 100 and greater than premium gasoline — giving FFVs greater performance over gas-powered vehicles but fewer miles per gallon because of the lower energy content. E85 does burn cleaner than gasoline and provides a significant reduction in greenhouse gas emissions.

See Also:
* National Ethanol Vehicle Coalition (
* Ethanol in Vehicles (

Ethanol is a small part of the country's energy supply. Why even bother?

America has a significant dependence on foreign oil. In 2006, the Energy Information Administration (EIA) forecasted that between 2000 and 2025, the nation’s oil consumption would grow 44 percent and dependence on imports will grow from 54 percent to 70 percent. Ethanol is produced in America and from a renewable source — meaning that ethanol is the best alternative liquid transportation fuel available that can reduce America’s dependence on foreign oil. Ethanol is also a high octane blend component which is very important to improving refinery output and economics. By the end of 2008, the Renewable Fuels Association estimates that our nation will have enough ethanol production capacity to displace oil imports from any OPEC nation, including Saudi Arabia.

See Also:
* Renewable Fuels Association (
* Annual Energy Outlook 2008 with Projections to 2030: Market Drivers (
* Energy & Natural Resources Committee Hearing on the Biofuels for Energy Security and Transportation Act of 2007 (

Does the use of ethanol really have a positive impact on the environment?

Ethanol adds oxygen to fuel, reducing the amount of harmful tailpipe emissions released when burned. In fact, the American Lung Association of Metropolitan Chicago credits ethanol-blended fuel with reducing smog-forming emissions there by 25 percent since 1990. In addition, carbon dioxide released during ethanol production is actually absorbed by grain or other biomass used to make ethanol. Vehicles using ethanol produce lower carbon monoxide (CO) and carbon dioxide (CO2) emissions, lower levels of hydrocarbon and non-methane hydrocarbon emissions and fewer evaporative emissions because ethanol has fewer volatile components. The Argonne National Laboratory reported that the use of 6.5 billion gallons of ethanol in the U.S. during 2007 resulted in the reduction of greenhouse gas emissions by approximately 10 million tons. The use of E85 alone contributes to a 20 percent reduction in ozone-forming pollution and a 30 percent reduction in greenhouse gas emissions.

See Also:
* Ethanol Promotion and Information Council (
* Clean Air Choice™ (
* Ethanol Facts: Environment (