Environmental Engineering Reference
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grow the corn, (2) most U.S. biorefineries use natural gas to convert biomass into
ethanol, and (3) the corn and the ethanol need to be transported.
A third challenge is the distribution of ethanol from the biorefinery to the
consumer, according to DOE officials. Ethanol cannot use the same infrastructure
as gasoline because it has corrosive qualities and is water soluble.[20] As a result,
an independent infrastructure system for transporting and storing ethanol would
be needed throughout the United States. In particular, no pipelines exist to
distribute ethanol from the Midwest, where it is mainly produced, to major
markets on the East and West coasts. In addition, infrastructure constrains the
distribution of E85—a blend of 85 percent ethanol and 15 percent gasoline—
because regular gas stations must have separate tanks for storing E85 and
specialized pumps for dispensing it. Currently, fewer than 1,000 fueling stations
provide E85 nationwide, compared with 176,000 gas stations. These ethanol
fueling stations are concentrated in the upper Midwest, and about 75 percent of
ethanol is transported by rail and 25 percent is moved by truck. U.S. consumers
have bought more than 5 million flexible fuel vehicles that can run on E85;
however, without a ready supply of E85, many of these vehicles will continue to
operate using gasoline.
Ethanol also faces the challenge of becoming more price-competitive with
gasoline. Currently the market for ethanol relies on federal tax incentives. One
such incentive is the volumetric ethanol excise tax credit, enacted in 2004, which
provides a 51-cent tax credit for every gallon of ethanol used to produce a fuel
mixture through December 31, 2010. Even with tax incentives for ethanol
producers, the fuel has been more expensive than gasoline, in part because
ethanol's energy content is lower than gasoline's. According to DOE and EPA,
flex fuel vehicles require about one-third more ethanol to match gasoline's energy
content. Similarly, in October 2006, Consumer Reports, estimated that drivers
paying $2.91 per gallon for E85 in August 2006 actually paid about $3.99 for the
energy equivalent of a gallon of gasoline because the distance vehicles traveled
per gallon declined by 27 percent.
Finally, congressional earmarks of DOE's biomass R and D funding rose
from 14 percent of the fiscal year 2000 funds to 57 percent ($52 million) of the
fiscal year 2006 funds, according to a DOE program official.[21] DOE program
officials told us that the rising number of biomass earmarks shifted funding away
from DOE's R and D program, causing the biomass program to change its
program priorities and terminated some of its cost-shared projects.
Congressionally earmarked projects typically are not subject to peer review, are
not selected on either their technical merits or their contribution to meeting
program goals, and are only voluntarily accountable for reporting results.
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