Cato Institute
Policy Analysis
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Ethanol also has an "embedded fuel" prob-
Under the leadership of Charles Imbrecht,
lem, since the created energy is largely can-
the CEC was attracted to a liquid fuel that
celed by the energy used to plant, harvest, fer-
could promote "energy security" by eroding
141
ment, and distribute the agricultural fuel.
the 99 percent market share of petroleum,
Environmentalists have not given ethanol
while offering the near-term potential of
a free ride despite qualifying it as a renewable
reducing ozone-forming emissions by 50 per-
resource. One analysis complained that
cent, compared with gasoline vehicles, and
"heavy use of fossil fuels by current agricul-
reducing particulate emissions by 100 per-
tural practices renders ethanol . . . from corn
cent,  compared  to  diesel  vehicles.1 4 6
fermentation . . . non-sustainable as now pro-
Government-subsidized vehicle purchases
duced."1 4 2 As it does on the electricity-genera-
and conversions and public-private partner-
ships with ARCO, Chevron, and Exxon to
tion side, "sustainability" would require
offer methanol in service stations were
renewable energy inputs and a "closed loop
undertaken.  Distributions  from  the
system" in which the agricultural inputs were
Petroleum Violation Escrow Account (money
grown in proportion to usage.
collected from oil companies to settle dis-
The major environmental problem of
putes under the federal oil price regulation of
ethanol combustion is the higher evapora-
The major
the 1970s) also helped fund this alternative-
tive emissions of smog-producing volatile
environmental
fuel program.
organic compounds, which must be bal-
Despite a 100-million-mile demonstra-
anced against ethanol's reduction of the
problem of
tion program with "no negative results,"1 4 7
other smog precursor, NO . The recent
x
ethanol combus-
extension of ethanol's federal tax break
the methanol initiative proved to be more of
tion is the higher
from 2000 to 20071 4 3 was more a victory for
a pilot exercise than a jump-start to a mass
market. The political hope and favor for
agricultural interests for than the environ-
evaporative
methanol would fade in the 1990s as succes-
mental community, which has traditionally
emissions of
sive reformulations of gasoline and improve-
been ambivalent if not hostile toward this
ments in onboard vehicle technology signifi-
motor-fuel alternative.1 4 4
smog-producing
cantly reduced emissions at an affordable
volatile organic
Methanol
cost with no inconvenience to motorists.
compounds.
More important, however, was the fact
Methanol is a sister fuel to ethanol and
that consumers were discouraged by a variety
can be distilled from natural gas, coal, or
of additional costs of methanol, including
wood products mixed with 15 percent gaso-
car conversion, higher fuel costs, more fre-
line to produce a fuel known as M85. In the
quent oil changes, and lower vehicle resale
1970s and 1980s, methanol attracted large
value. A General Services Administration
government favor as a more viable and near-
study in 1991 estimated that those extras
term choice than other alternative-fuel vehi-
amounted to a $8,000 premium compared
cle technologies. In a congressional hearing
148
with a conventional vehicle.
in 1986, General Motors called methanol
Because
"America's energy `ace in the hole,'" while the
methanol fuel tanks were necessarily much
American Automobile Association described
larger than gasoline tanks (because of the
it as "the number one alternative fuel of the
lower energy density of methanol), motorists
future." The EPA also tagged methanol as
were also faced with less storage space in
"the most promising alternative to motor
methanol-fueled cars. The absence of flame
vehicle fuel for this country."1 4 5
luminosity during methanol combustion
also posed a safety problem.
The political home for methanol in these
The beginning of the end for methanol as
high-water years was the CEC, the nation's
a viable transportation alternative came in
largest state energy agency in the world's
late 1993 when the Los Angeles County
third largest transportation market (after
Metropolitan Transit Agency terminated its
Russia and the rest of the United States).
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