Hello we're back to Energy 101. 
It, is still looking at energy sources. 
This time we're going to look at a 
renewable fuel, and that being ethanol. 
ethanol is a energy source. 
And it is a significant energy source as 
we saw last time. It makes up about 5% of 
our transportation fuel and is, 5% is a 
significant number, and it would, does 
substitute in gasoline on almost a 
one-to-one basis, although we'll talk 
about that a little more later, with, 
with gasoline. 
so a gallon of ethanol in your tank, 
mixed with a gallon of, gasoline would 
displace a gallon of gasoline. 
That's an oversimplification, but it is a 
direct substitute. 
But, how much of the Ethanol we're using, 
where does it come from? What are its 
characteristics. 
You hear a lot of various things about 
ethanol, good and bad. 
So let's look at some of them. 
Well, the US ethanol that is produced 
today is all, it all comes from corn, in 
any quantity of significance at all. 
so when, when you talk about ethanol in 
the US, we're talking about corn ethanol, 
and you hear other terms such as 
cellulosic ethanol. 
We currently do not get any significant 
corn ethanol from cellulosic material, 
which we'll refer to later. 
But at the current time, 40% of the corn 
grown in the US goes to ethanol fuel. 
That's a pretty astounding number. 
that's 40% of the corn grown, and it 
really ethanol as a demand for corn Is a, 
is a compete, competitor to food. 
Because of course one of the big 
producers, users of corn is raising a 
beef cattle and hogs and things and pigs 
and porc and so That, the and price of 
anything at your grocery store that's 
made from corn has gone up in price 
because 40% of the demand for corn as a 
whole goes toward ethanol, which is not a 
food product. 
So that's, that's one issue with corn 
ethanol. 
Again, [INAUDIBLE] cellulosic ethanol, 
which we hope to get to here shortly in 
the future, regarding the US, production 
of ethanol, is another ballgame. 
By the way, Brazil here, Brazil has 
started back in the early 80's. 
Producing ethanol from sugar cane and 
they have a long growing season. 
They have inexpensive labor, in order to 
harvest it and deal with it, the handling 
of it. 
so they are getting a substantial amount 
of their. 
transportation fuels from ethanol, and 
even exporting it some around the world. 
so what has happened to ethanol 
production in the past, From period 1980 
to current. 
So over here, we see that in 1980, the 
production of ethanol was very low. 
It was down at 0.02 or so barrels, 
million barrels per day. 
.02 20,000 barrels per day, very very 
low. 
And it is, it gradually went up as we 
moved down to 2001, 2002 and at this 
point you started having subsidies of 
approximately 50 cents a gallon for the 
production of ethanol to go into 
gasoline. 
And since then, it has skyrocketed. 
And that's just, that's basically due not 
only to the 50 cents a gallon subsidy, 
but it also is do to mandates to blend 
gasoline that's put into automobiles with 
10% ethanol. 
And so, so all cars now, essentially all, 
not 100%, but almost 100% of the gasoline 
that you get at the corner filing station 
contains 10% ethanol, and that's, a lot 
of that, most of that is by mandate. 
they mandate every year so many gallons 
of ethanol must be used to, in blending 
with gasoline. 
And that has driven the production of 
ethanol. 
At the end of 2011 the, 
approximately 50%, $0.50 a gallon subsidy 
for, ethanol blended with gasoline went 
away, which had, stayed for gosh 15, 20 
years at least. 
But it's, that's now gone, but the 
mandate to blend a certain number of 
gallons a year has continued to increase 
and therefore the production of ethanol 
is now almost a million barrels a day. 
And I've put everything pretty much on 
the same. 
Units here and that is millions of 
barrels per day when we're talking about, 
natural gas liquids or crude oil or 
ethanol, 
barrels per day in the production. 
So remember we're producing in this 
country about 6 million barrels a day of 
oil, and we're producing almost one 
million barrels per day of ethanol. 
So that's, that's a pretty good chunk, 
and it does substitute almost on a one to 
one basis in displace in the use of crude 
oil, so that we don't, don't have to 
import that million barrels a day from 
overseas or outside the country. 
So it does reduce crude oil consumption 
on almost a one-to-one basis, but not 
quite. 
how does, eh, how is, does ethalol, 
ethanol used, in our transportation 
fleet? Well, in mostly it's with 10% 
ethanol and 90% gasoline. 
All cars are now approved for 10, use of 
10% ethanol. 
and even in cars since 2000, produced 
since 2000 have just recently been 
approved. 
Retroactively for 15% ethanol. 
Because with the recession and the 
decreased gasoline sales there wasn't, 
you couldn't get there wasn't enough 
gasoline being used to, at 10% ethanol 
concentration to use all the ethanol that 
was mandated to be blended. 
But 
another way that we use ethanol in our 
transportation vehicles is E85. 
E85 is 85% ethanol, 15% gasoline, 
and it's, can only be used in flex fuel 
vehicles. 
They're special vehicles. 
There's some mileage boost that you get 
if the manufacturer of automobiles make 
them flex fuel. 
It only costs the manufacturer a $100 or 
$200 to make Cars that they produce, the 
Chevrolets, Fords, Cadillacs, Mercedes, 
BMWs, whatever they might be, to convert 
them to where they can use either 100% 
gasoline or 15% gasoline and 85% ethanol. 
You put anything in the tank and 
detectors detect what it is and make all 
the adjustments in the fuel distribution 
system so that the car runs fine. 
there are approximately 10 million flex 
fuel vehicles on the road, that's out of 
a couple hundred million vehicles that 
are on the road. 
So about 5% of them are already flex fuel 
vehicles and about million a year, or 
close to it, are being added to our fleet 
on the road today. 
So that's the way the ethanol is used and 
the reason it makes up about. 
5% of our total transportation fuel and 
that's shown here. 
We saw this pie chart before, the yellow 
is the 5% in ethanol. 
72% gasoline, 23% diesel, by the way that 
70%, 72% gasoline includes things like 
aviation fuel. 
And that we don't blend ethanol with 
aviation fuel. 
It, it's because of this unique 
characteristics of aircraft engines. 
now I've, I've mentioned a couple times 
that, that a gallon of ethanol displaces 
and can displace a gallon of, 
approximately a gallon of oil or 
gasoline. 
Well that's not really true as I we look 
at it a little closer. 
And the reason is, is that if I burn a 
gallon of ethanol I get about 2/3 of the 
amount of heat released as I get from a 
gallon of gasoline. 
So that means when I go to the fuel 
station and corner gasoline station and 
pump. 
90% ethanol, and 10%, excuse me. 
90% gasoline, and 10% ethanol, 
I cut my gas mileage a little bit 
compared to 100% gasoline. 
And take, for an example, a, a 30 miles 
per gallon auto that will get 30 miles 
per gallon on 100% gasoline, will get 
about 28 miles per gallon on. 
10% ethanol fuel, that exclamation point 
should be a 1, I apologize for the typo 
here, that's 10%, 10% ethanol. 
So ethanol will, you'll use more gallons 
of ethanol to go the same distance than 
you will from gasoline. 
So there's not quite a 1 to 1 energy 
balance there. 
Well what percent then is that of the, 
looking at liquefied, a liquid petroleum, 
total liquid petroleum, which is a term 
that is used a lot and you see it in the 
press and newspaper articles and TV media 
presentations, that they talk about 
petroleum. 
So petroleum are liquids, but then they 
are made up of ethanol, natural gas, 
liquids that we talked about last time, 
and oil. 
Now how does the production compare? We 
looked at, before, the production of 
natural gas liquids, 
which is the red here, that's added to 
oil that's in the blue down here. 
So, this is about the 6 million barrels 
per day. 
The, natural gas liquids is about 2 
million barrels per day. 
And this is about 6. 
And the ethanol is about, 
One millions barrels per day. 
So you can see that these 2 here, in 
particular and, well, this crude oil with 
the marking discovery and things have 
increased production significantly since 
2008. 
So if we add all of them together, we're 
up here. 
at in 2008, we were about 7 1/2, and now, 
we're about, 8.7 or so. 
So that's a significant increase, 7 1/2 
to 8.3 or 4, 
8.7 or so. 
So, things, things are improving in 
trend, when we add all those together. 
But, we talked about last time, and 
natural gas liquids. 
they do not substitute on a 1 to 1 basis 
for oil. 
ethanol does a better job of it, but it 
substitutes on about a, 1 barrel of, er, 
ethanol substitutes for about 2/3 barrel 
of gasoline, 
so we had to be careful about that. 
Okay. 
You hear a lot about that, the term 
ethanol energy balanced produced, for 
ethanol produced from corn. 
what we're talking about there is how 
much fossil fuel does it take to make a, 
ethanol, that has one unit of energy in 
it, make the unit anything you want, make 
it a million barrels of ethanol or you 
can it one barrel of ethanol or one 
gallon of ethanol. 
it requires .8 units of fossil fuels to 
make energy, enough energy in ethanol to 
produce one unit of the ethanol. 
So it's pretty thin, it's only about 20% 
gain, but the fossil fuels aren't oil in 
general. 
They're primarily natural gas and coal, 
so in some ways it's like we're, we're 
transforming natural gas and coal into a 
transportation fuel, which is not 
typically used for transportation. 
So that's one way to view it, because it 
takes about .8 equivalent barrels of 
natural gas and coal equivalent on an 
energy basis to make one equivalent unit 
of corn ethanol. So it's, it's, it's not 
a very renewable fuel in that regard, 
because we're only gaining about .2 units 
for every one unit of ethonal we produce, 
as fare as gaining in the energy 
produced. 
This is shown here with a corn ethanol 
That this is percent of ethanol energy 
output, how much, how much energy input 
has to go in to produce the ethanol, 
that's fossil fuel inputs. 
And here's the yellow is coal, the red is 
natural gas. 
Other is green and oil is, is blue. 
Now the kind of things that these are 
used for instance is the tractors that 
plow the fields and pick the corn, use 
petroleum, use diesel fuel or gasoline 
and in the processing of, 
of corn to ethanol, it takes a lot of 
natural gas, because you get a lot of 
water mixed with the ethanol, and you 
have to increase the concentration to 
about 99% pure ethanol and 1% water, and 
it comes out of the, at one point it 
comes out at about 80%, water and 20% 
ethanol. 
So we have to distill it down, it takes a 
lot of natural gas. 
So those the kind of ways that we have to 
use fossil fuels to produce ethanol, corn 
ethanol, that is. 
And if you compare that with cellulosic 
ethanol, that we can certainly do it in 
the laboratory, we can get it for 
instance wood, like wood alcohol that 
we're, 
that you, start, invented, so to speak, 
and the process was invented in 8, 1898. 
it takes very little fossil fuel energy, 
in energy input, in order to produce a 
full unit of, of ethanol energy in the, 
etha, when we burn it So, cellulosic 
ethanol, which wood is just one example 
of it, would be much much better from an 
energy balance viewpoint. 
Okay, next time we'll look at look at 
some of the energy independence, 
what all this means. We hear about energy 
independence, you hear about, a lot about 
oil independency, energy independence. 
So we'll look at those topics now that 
we've covered all of the significant 
fossil fuel production that we have coal, 
oil, gas, natural gas, liquids, and 
ethanol. 
Thank you. 
See you next time.