Nobrainer’s Think Tank

After reading this story about a topless woman, I noticed the link to another article about the increasing interest in ethanol as a fuel.

E85 is a blend that is 85% ethanol and 15% gasoline. The article notes that many of today’s cars can run on this blend. Furthermore, it notes that per gallon you save about 45 cents.

Of course, E85 isn’t taxed at 18.4 cents per gallon like gasoline.

Of course, 44 cents of every gallon is subsidized by the government.

Of course, ethanol doesn’t work well in cold environments.

Of course, you can expect to lose 5 to 15% fuel efficiency (or maybe more) using the blend.

Of course, most states don’t tax E85 like gasoline.

Using the average gasoline price of $2.24 provided in the article, and the 45 cent savings E85 is $1.79 per gallon. I’ll assume that state gas taxes are part of the actual cost of a gallon of gasoline and that there is an average 10% efficiency loss. Correcting for the other factors I listed above, gas is $2.056/gallon and E85 is $2.48/gallon.

Of course, since road funding comes from gas taxes, E85 will have to eventually be taxed instead of surplused.

Of course, I imagine most of the corn being used to produce the E85 is the leftover that no one wants to eat and is very cheap. So a huge increase of demand will make it even more expensive.

I’ll add onto and update this post later tonight as I should be preparing for a 2 o’clock meeting right now. I managed to dig up more interesting information on this alternative fuel source and its side effects that I’d like to summarize for you, my loyal readers.

Add-OnsFrom the World of Molecules

Critics contend that it is economically absurd to consider ethanol from grain as a replacement for petroleum, when industrial ethanol is made from petroleum feedstocks because it is far cheaper than fermented ethanol.

The Brazilian experiment
In Brazil, ethanol is produced from sugar cane—which is a more efficient source of fermentable carbohydrates than corn, and much easier to grow and process. Sugarcane growing requires little labor, and government tax and pricing policies have made ethanol production a very lucrative business for big farms. As a consequence, over the last 25 years sugarcane has become one of the main crops grown in the country.

The cane is pressed, fermented, and distilled at large ethanol plants, typically owned and run by big farms or farm consortia, and located near the producing fields. The stalk fibers (bagasse) which are left over from sugarcane processing are regularly used as fuel by the refineries, thus reducing the production costs. The bulk product is sold at regulated prices to the state oil company (Petrobrás).

Most cars run either on alcohol or on gasohol; only recently have dual-fuel engines become available. The market share of the two types has varied a lot over the last decades, in response to fuel price changes (which are fixed by the government, largely for political reasons). Most gas stations sell both fuels.

The Brazilian ethanol-for-fuel program significantly reduced the country’s oil import bill, and noticeably improved the air quality in big cities. However, it also brought a host of environmental and social problems of its own. Sugarcane fields are traditionally burned just before harvest, in order to remove the leaves and kill snakes. Therefore, in sugarcane-growing parts of the country, the smoke from burning fields turns the sky gray throughout the harvesting season. As winds carry the smoke into nearby towns, air pollution goes critical and respiratory problems soar. Thus, the air pollution which was removed from big cities was merely transfered (and multiplied) to the rural areas. (This practice has been decreasing of late, due to pressure from the public and health authorities; but the powerful sugarcane growers’ lobby has managed to prevent a total ban.)

The ethanol program also led to widespread replacement of small farms and varied agriculture by vast seas of sugarcane monoculture, leading to a decrease in biodiversity and further shrinkage of the residual native forests (not only from deforestation but also through fires caused by the burning of adjoining fields). The replacement of food crops by the more lucrative sugarcane has also led to a sharp increase in food prices over the last decade.

Since sugarcane only requires hand labor at harvest time, this shift also created a large population of destitute migrant workers, who can only find temporary employment as cane cutters (at about US$3–5 per day) for one or two months every year. This huge social problem has contributed to political unrest and violence in rural areas, which are now plagued by recurrent farm invasions, vandalism, armed confrontations, and assassinations.