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Ethanol fights back

Posted by Bill Sluben on October 26, 2009

With last year’s drop in gasoline prices and the over abundance of corn and other bio-fuels, it looked like Ethanol had merely a brief stay at the top of consumer mindset in the hunt for renewable resources and energy that can be used to fuel vehicles.

Enter Mr Obama and Congress which have set a deadline of 2022 for this country to increase bio-fuel production to 36 million barrels, of which 15 million will come from corn.  An estimated 85 million acres of corn will be planted in the U.S. this year in an effort to ramp up production.

So where does this leave the automotive industry?  Consider that there are currently a little over 2,200 service stations in the U.S. where Ethanol is available.  That figure is forecast to double in the coming 1-2 years.  The current number of gasoline service stations in the U.S. is just under 167,000…so the ethanol supply is fairly restricted right now.

The first step in really creating systematic change within the industry is a bottom up push by consumers who want the alt-fuel because it is cheaper and because it has long term geo-pol advantages to the U.S. (forget the global warming debate for now).  Government subsidies will be required to bring the grid of service stations offering ethanol on-line – we’re talking about ethanol products to approximately 75,000 to 100,000 stations.  A massive endeavor to say the least.  It can (and should) be done until the real advantages of battery cell can be realized in the form of lower costing and widely available vehicles.

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