How much of an advantage are alternative fuels?

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At the SOTU last night, Bush called for an increase in the use of alternative fuels like ethanol. The claimed goal is to replace 15% of gasoline use with alternative fuels by 2017. There are two potential reasons you might want to do this:
  • To replace imported sources of automotive fuel (i.e., oil) with domestic sources.
  • To reduce the total level of global greenhouse gas emissions.

There's a lot of debate about the energy balance of corn ethanol (what's mostly produced in the US). The USDA's The Energy Balance of Corn Ethanol An Update, which is on the optimistic side of the range, estimates a 1.34 energy ratio (though a 6.34 liquid fuel ratio because you can use coal and natural gas to power a lot of the production process). So, you should expect that you'll get quite a bit of that 15% as a substitution of domestic energy sources for imported oi, but the overall reduction in GGG emission is going to be closer to 5% than 15%.


Part of the problem is that North America is showing signs of peaking in its natural gas production. That's why all the pressure for LNG terminals which nobody wants to live near. If we can't import NG then we'll have to use coal to make ethanol, which is a lot dirtier and makes the pollutant situation much worse.

Now they're talking about importing Brazilian ethanol in order to meet the Bush targets. Of course the corn farmers are up in arms against reducing ethanol import taxes.

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