Ethanol Producers Are at Maximum Capacity … and Still 6 Billion Galons Short:

4 Reasons Demand - and Profits - Will Continue To Surge

About a century ago, Henry Ford, inventor of the automobile, envisioned ethanol as the primary energy source for his Model T. He deemed it the “fuel of the future”. However gasoline, the cheaper alternative, became the established fuel… and so it has remained.

Now it seems he was really on to something, today Today, Ford has over 1.6 million automobiles on the road capable running on E85.

Many experts agree that a switch from gasoline to ethanol could significantly reduce our carbon dioxide emissions, some say by as much as 80%.

Ethanol’s appeal extends throughout interest groups. The U.S. government, American car manufacturers, environmentalists and the agriculture industry are all strong supporters of this alternative fuel.

There are 97 existing ethanol refineries in the U.S. pumping at maximum capacity. Nine are expanding and an additional 35 plants are currently under construction. But there’s one problem: There’s simply no way they can keep up with the surging demand for this alternative fuel.

By federal mandate, the country must use 7.5 billion gallons of renewable fuels by the year 2012, up from an estimated 5 billion gallons this year. And lawmakers in Washington are contemplating an even higher target: 15 billion gallons. The Wall Street Journal predicts that U.S. ethanol demand will likely increase by at least 50% this year alone.

This sudden demand for ethanol has allowed suppliers to sell out entire inventories at high enough prices to fund a massive – and highly profitable – construction boom.

The total number of ethanol refineries is expected to double within the next few years, and an estimated 3 billion gallons of new capacity will be ready by 2008–a 40% increase over today’s capacity just to try and keep up with demand.

Use of Biodiesel for a better environment

What is Biodiesel?

Biodiesel (fatty acid alkyl esters) is a cleaner burning diesel replacement fuel made from natural, renewable sources such as new and used vegetable oils and animal fats. Just like petroleum diesel, biodiesel operates in compression-ignition engines. Blends of up to 20% biodiesel (mixed with petroleum diesel fuels) can be used in nearly all diesel equipment and are compatible with most storage and distribution equipment. These low-level blends (20% and less) generally do not require any engine modifications, however, users should consult their OEM and engine warranty statement. Biodiesel can provide the same payload capacity and as diesel. For more information on fuel blends of 20% biodiesel or less.

Higher blends, even pure biodiesel (100% biodiesel, or B100), may be able to be used in some engines (built since 1994) with little or no modification. However, engine manufacturers are concerned about the impact of B100 on engine durability. Additionally, B100 is generally not suitable for use in low temperature conditions. Transportation and storage of B100, however, require special management.

Using biodiesel in a conventional diesel engine substantially reduces emissions of unburned hydrocarbons, carbon monoxide, sulfates, polycyclic aromatic hydrocarbons, nitrated polycyclic aromatic hydrocarbons, and particulate matter. These reductions increase as the amount of biodiesel blended into diesel fuel increases. The best emission reductions are seen with B100.

The use of biodiesel decreases the solid carbon fraction of particulate matter (since the oxygen in biodiesel enables more complete combustion to CO2) and reduces the sulfate fraction (biodiesel contains less than 15 ppm sulfur), while the soluble, or hydrocarbon, fraction stays the same or increases. Therefore, biodiesel works well with emission control technologies such as diesel oxidation catalysts (which reduce the soluble fraction of diesel particulate but not the solid carbon fraction).

Emissions of nitrogen oxides increase with the concentration of biodiesel in the fuel and the increase is roughly 2% for B20. Some biodiesel produces more nitrogen oxides than others, and some additives have shown promise in reducing the increases. More R&D is needed to resolve this issue.

Biodiesel has physical properties very similar to conventional diesel.

Biodiesel Benefits

Because little fossil energy is required to move biodiesel, it is a substitute or extender for traditional petroleum diesel, and special pumps or high pressure equipment for fueling are not needed. In addition, it can be used in conventional diesel engines, so special vehicles or engines to run biodiesel do not need to be purchased. However, users should always consult with the OEM and engine warranty statement before using biodiesel.

Scientists believe carbon dioxide is one of the main greenhouse gases contributing to global warming. Neat biodiesel (100% biodiesel) reduces carbon dioxide emissions by more than 75% over petroleum diesel. Using a blend of 20% biodiesel reduces carbon dioxide emissions by 15%.

Biodiesel also produces fewer particulate matter, carbon monoxide, and sulfur dioxide emissions (all air pollutants under the Clean Air Act).

Since biodiesel can be used in conventional diesel engines, the renewable fuel can directly replace petroleum products; reducing the country’s dependence on imported oil.