The Ethanol Effect, Part Two

By Richard Snowden

Despite opposition from David Pimentel and Tad Patzek’s study, others feel their findings were biased in favor of big oil companies.

“What you have here is a pair of professors with ties to the oil industry trying to shoot holes in ethanol,” said Matt Hartwig, communications director for the Renewable Fuels Association. “If you look at most other studies, they indicate that ethanol is very viable. You actually see a net energy gain when all factors are considered.”

John Byrne, director of the Center for Energy and Environmental Policy at the University of Delaware, offered a similar assessment.

“I think the good work that’s been done at the national level indicates that while ethanol does consume a good bit of resources in production, it still yields a net energy gain,” Byrne said. “Especially when ethanol is used in a blend with gasoline, it offers a gain in energy terms.”

Byrne said ethanol poses a threat to oil industry profits, which soared to such highs this year that industry executives recently appeared before Congress to respond to allegations of price gouging.

“The oil industry doesn’t like ethanol since it represents a cut into their market share,” Byrne said. “I think you’re looking at the 10 to 15 percent ethanol blends becoming more prevalent in the coming years, and that alone represents a significant loss of income for oil companies.”

The future of ethanol

In spite of Pimentel and Patzek’s conclusions, as well as the unpopularity of alternative fuels with the politically influential oil industry, ethanol may still have a healthy future as an alternative energy source.

“Currently, ethanol plants in the United States produce just shy of 4 billion gallons per year,” Hartwig said. “With the energy legislation that was passed by Congress recently, we’re probably looking at a doubling of the size of the ethanol production industry.”

Kristin Brekke, a communications director at the American Coalition for Ethanol, agreed that the new federal energy legislation would be a key contributor to ethanol’s growth as an alternative fuel source.

“With the renewable fuels standard passed in the energy bill in August, an extra 7.5 billion gallons of ethanol per year will be required by 2012,” Brekke said. “That guarantees a minimum demand for ethanol, which will help the industry to keep growing.”

Byrne believes ethanol’s momentum could increase as oil companies face mounting pressure to replace fossil fuels with renewable energy sources in the coming years.

“The oil industry is working with a fixed product base,” he said. “There’s a finite amount of oil in the world, so I think we’ll see increasing pressure on oil companies to start trying to move away from oil and toward alternative sources of energy.”