Ethanol stands for “ethyl alcohol,” a 200-proof grain alcohol made by fermenting feedstock such as corn, sugars, starches and other cellulosic matter. Most ethanol in the US is produced from corn. When blended with gasoline or diesel, ethanol acts as an oxygenate, allowing a more complete fuel combustion that results in fewer tailpipe emissions (Source).

Many people confuse the terminology associated with ethanol. Ethanol is 100% pure alcohol coming from the production facility. E85 is an alternative fuel blend consisting of 85% Ethanol and 15% gasoline. E10 is a blend of 10% ethanol and 90% gasoline; most unleaded gasoline sold in the US is E10. E15 is a new, higher-octane fuel blend consisting of 15% ethanol, 85% gasoline.

Cellulosic ethanol is made from non-food structural fibers of plants and a wide variety of materials have the potential to be converted to cellulosic fuel. Examples include agricultural residues such as corn stover, cereal straws, and sugarcane bagasse; industrial waste such as sawdust, paper pulp and organic matter; and energy crops such as switchgrass, hybrid populars, and willows (Source). Cellulosic ethanol is currently in the research and development stage, as major challenges include harvesting and up-front processing to make cellulosic ethanol cost competitive with corn-ethanol (Source).

All vehicles are “ethanol-capable” and can use a blend of up to 10% ethanol (E10). Most gas stations dispense E10 gasoline because of its fuel-extending and clean burning properties. Since the 1980s, all automakers have covered the use of 10% ethanol under warranty, and no engine modifications are necessary to use E10. Recently, the EPA approved E15 (15% ethanol, 85% gasoline) for use in light duty vehicles from model year 2001 and newer.

E85 fuel is designed specifically for flex-fuel vehicles (FFVs). Flex-fuel vehicles can run on straight unleaded gasoline or a blend of ethanol up to 85%. Sometimes flex-fuel capacity is standard on a vehicle and sometimes it can be added optionally. Consult your owner’s manual or inside the gas cap to determine if your vehicle is an FFV (Source). ).

Flex fuels containing more than 10-15% ethanol (depending on the vehicle) are not covered by warranty and should not be used in any vehicle besides a flex-fuel vehicle. Converting gasoline vehicles to FFVs is technically possible, but must be certified by the EPA Certificate of Conformity or the California Air Resources Board (CARB) to legally drive on roads (Source).

Ethanol has lower energy content--84,820 Btu/gal—than gasoline’s 124,340 Btu/gal (Source). Given this discrepancy, FFVs using ethanol typically drive 15-25% fewer miles per gallon that gasoline vehicles (Source). However, ethanol provides virtually the same acceleration as gasoline, and benefits from an octane number 2.5 points higher than gasoline, making the fuel less taxing on an engine (Source).

Crops grown to produce ethanol capture carbon dioxide, helping to balance the carbon dioxide emitted when the fuel is burned. The Alternative Fuels Data Center estimates that corn-based ethanol reduces life-cycle greenhouse gas emissions by up to 52% compared to gasoline. Cellulosic ethanol can see reductions up to 86% compared to gasoline (Source). If 4 billion gallons of ethanol were consumed annually, about 26 million metric tons of carbon dioxide emissions would be eliminated (Source). Additionally, since ethanol acts as an oxygenate, allowing for more complete combustion in the engine, fewer hydrocarbons are emitted from a vehicles tailpipe. E10, for example, provides a 25-30% reduction in carbon monoxide emissions, according to the National Center for Vehicle Emissions Control and Safety (Source).

As a domestically-produced fuel extender, ethanol helps reduce our dependence on volatile petroleum markets. A 2012 study from Louisiana State University found that ethanol production lowered gasoline prices by an average of $0.89 per gallon, amounting to $108 billion in savings for US drivers annually (Source, p. 15).

Additionally, the growth of the US ethanol industry has contributed to domestic job and revenue growth. In 2013, the production of 13.3 billion gallons of ethanol created:
     •  86,504 direct jobs
     •  300,277 indirect and induced jobs
     •  $44 billion in gross domestic product (GDP)
     •  $31 billion in household income
     •  $8.3 billion in tax revenue
(Source)

For a complete list of gas stations offering E85, visit the Alternative Fueling Station Locator.

There are many misconceptions about the net energy balance resulting from ethanol production. According to a study by the USDA, evaluating through a life cycle approach, corn-based ethanol produces 34% more energy than it takes to produce (Source). A study by the Argonne National Laboratory found that the fossil energy input per unit of ethanol is .74 million Btu, while the equivalent measure for gasoline is 1.23 million Btu, revealing that ethanol production requires fewer fossil fuel inputs than gasoline production(Source).

Furthermore, over the past few decades, ethanol production has become much more efficient. For example, from 2001-2006, US ethanol production increased by 276%, but during this expansion, water consumption fell 26.6%, grid electricity use fell 15.7% and total energy use fell 21.8% (Source).

An added benefit, byproducts of ethanol production can be repurposed for other uses. For example, 1 bushel of corn yields 2.8 gallons of ethanol and 17-18 pounds of livestock feed (Source).

Currently, 40% of America’s corn crop is used for ethanol production (Source). An increasing demand for corn for ethanol production does influence the supply and demand for other food crops. A study by the Congressional Budget Office found that of the 5.1% increase in food prices overall from 2007-2008, corn-ethanol production contributed only .5-.8% of this increase (Source). Additionally, under the Renewable Fuel Standard ethanol production will be capped at 15 billion gallons per year starting in 2015, ensuring that ethanol production will not infringe upon future food production (Source).

Beginning with the Energy Tax of 1978, the US federal government provided a tax credit for ethanol producers ranging from 40-60 cents per gallon over the years. The goal of this credit was to incentivize domestic energy production at the height of the international oil crisis, and ultimately provide consumers lower prices for E85 at the pump. The Volumetric Ethanol Excise Tax Credit, signed by President Bush in 2005, altered the modern ethanol subsidy by crediting ethanol “blenders” rather than ethanol producers (Source). The Renewable Fuel Standard (RFS) of 2005 mandates that 36 billion gallons of alternative fuel must be blended with gasoline by 2022, mostly through blends of gasoline and ethanol. The RFS is not a direct subsidy, but the guaranteed market for alternative fuels is projected to stimulate growth in the industry (Source). In 2012, renewable energy credits were reinstated through the America Taxpayer Relief Act, providing $0.31 per gallon of ethanol (Source). Ultimately, these credits have led to lower prices at the pump for a cleaner, abundant domestic energy source.

Ethanol is an important domestic fuel industry in the United States. In 2013, ethanol accounted for 10% of the US gasoline supply, and 98% of ethanol was produced from corn. As of January 2014, there were 210 operational ethanol plants in the US with a total production capacity of 14.88 billion gallons per year. In 2013, the ethanol industry added $44 billion to US gross domestic product (Source).