FAQs on ethanol

• Marketing of commercial alcohol-blended fuels began. Amoco Oil Company began marketing commercial alcohol-blended fuels, followed by Ashland, Chevron, Beacon, and Texaco.
  
  
• About $1,000,000,000 ($1 billion) eventually went to biomass related projects from the Interior and Related Agencies Appropriation Act.

• 1980 - First U S survey of ethanol production was conducted. The survey found fewer than 10 ethanol facilities existed, producing
  approximately 50 million gallons of ethanol per year. This was a major increase from the late 1950s until the late 1970s, when virtually no fuel ethanol was commercially available.
  
  
• Congress enacted a series of tax benefits to ethanol producers and blenders. These benefits encouraged the growth of ethanol production.
  
  
• 1980 - The 'energy security act' offered insured loans for small ethanol producers (less than 1 million gallons per year), up to $1 million in loan guarantees per project that could cover up to 90 percent of construction costs on an ethanol plant, price guarantees for biomass energy projects, and purchase agreements for biomass energy used by federal agencies.
  
  
• 1980 - Congress placed an import fee (tariff) on foreign-produced ethanol. Previously, foreign producers, such as Brazil, were able to ship less expensive ethanol into the United States.
  
  
• 1980 - The 'gasohol competition act' banned retaliation against ethanol resellers.
  
  
• 1980 - The 'crude windfall tax act' extended the ethanol-gasoline blend tax credit.
  

• The number of ethanol plants in the U S peaked at 163.
  
  
• The 'tax reform act' increased the ethanol subsidy to 60 cents per gallon.
  

• Many ethanol producers went out of business, despite the subsidies.
  
  
• Only 74 of the 163 commercial ethanol plants (45 per cent) remained operating by the end of 1985, producing 595 million gallons of ethanol for the year.
  
  
• One reason for producers going out of business was the very low price producers could receive for their ethanol (even with a subsidy of 60 cents per gallon), since the prices of crude oil and gasoline were so low. Despite the very low price of corn, which is the main driver of the cost of producing ethanol, nothing was enough to prevent the high rate of market change.
  

• Ethanol was first used as an oxygenate in gasoline. Denver, Colorado mandated oxygenated fuels (i.e., fuels containing oxygen) for winter use to control carbon monoxide emissions.
  
  
• Other oxygenates added to gasoline included MTBE (methyl tertiary butyl ether - made from natural gas and petroleum) and ETBE (ethyl tertiary butyl ether - made from ethanol and petroleum).
  
  
• MTBE dominated the market for oxygenates.
  

• Omnibus budget reconciliation act' decreased the ethanol subsidy to 54 cents per gallon of ethanol
  
  
• Ethanol plants began switching from coal to natural gas for power generation and adopting other cost-reducing technologies.
  
  
• An expanding market and the high cost of fructose corn syrup encouraged expansion of wet mill plants that produce the syrup as a by-product of the ethanol production process.
  

• The 'energy policy act' of 1992 (EPACT) provided for two additional gasoline blends (7.7 per cent and 5.7 per cent ethanol).
  
  
• EPACT also defined ethanol blends with at least 85 per cent ethanol as "alternative transportation fuels." It also required specified car fleets to begin purchasing alternative fuel vehicles, such as vehicles capable of operating on E-85 (a blend of 85 per cent ethanol and 15 per cent gasoline). The EPACT also provided tax deductions for purchasing (or converting) a vehicle to that could use an alternative fuel such as E-85 and for installing equipment to dispense alternative fuels.
  
  
• The 'clean air act' amendments mandated the winter-time use of oxygenated fuels in 39 major carbon monoxide non attainment areas (areas where EPA emissions standards for carbon mioxide had not been met) and required year-round use of oxygenates in 9 severe ozone non attainment areas in 1995.
  
  
• MTBE was still the primary oxygenate used in the U.S.
  

• The excise tax exemption and income tax credits were extended to ethanol blenders producing ETBE.
  
  
• The EPA began requiring the use of reformulated gasoline year round in metropolitan areas with the most smog.
  

Major U S auto manufacturers began mass production of flexible-fueled vehicle models capable of operating on E-85, gasoline, or both. Depsite their ability to use E-85, most of these vehicles used gasoline as their only fuel because of the scarcity of
E-85 stations.

• U.S. automakers continued to produce large numbers of E-85-capable vehicles to meet federal regulations that require a certain percentage of fleet vehciles to be capable of running on alternative fuels. Over 3 million of these vehicles were in use.
  
  
• At the same time, several States were encouraging fueling stations to sell E-85.
  
  
• With only 169 stations in the U.S. selling E-85, most E-85 capable vehicles are still operating on gasoline instead of E-85.
  

• A 1998 law reduced the ethanol subsidy to 52 cents per gallon starting January 1, 2003.
  
  
• Blending of 5 per cent ethanol in petrol mandated in India and 10 per cent in Colombia.
  As of October 2003, a total of 18 States had passed legislation that will ban MTBE - but none of the states that are major users of MTBE, such as CA, CT, KY, MO and NY have their ban in effect yet.
  
  
• California began switching from MTBE to ethanol to make reformulated gasoline, resulting in a significant increase in ethanol demand by mid-year, even though the California MTBE ban does not go into effect until January 1, 2004.
  
  
• New York and Connecticut are planning for increased ethanol use in late 2003 becuase MTBE bans in their states will also take effect on January 1, 2004.