Full Title: Should Ethanol Made from Natural Gas be Added to the Federal Biofuel Mandate?
Author(s): Lindsay Leveen
Publisher(s): Institute for Energy Research
Publication Date: June 1, 2013
Full Text: Download Resource
Description (excerpt):
The recent dramatic increase of natural gas supply in the United States and Canada thanks to the booming shale industry has resulted in the discussion of a public policy to support and subsidize the production of ethanol from natural gas (EFNG). The EFNG industry and its supporters have offered this “chemically synthesized” ethanol as a possible substitute for corn ethanol and the yet–to-be produced “cellulosic” ethanol, arguing that EFNG is both green and does not take away from the food supply.
In summary, producing ethanol from natural gas is expensive, emits significant amounts of additional carbon dioxide, and is wasteful of the energy content as well as the hydrogen content of the natural gas that can be used more effectively in alternate applications. A simple alternate application such as CNG vehicles will lower overall carbon emissions and improve the efficiency of our collective energy usage in transportation, and this transition can occur in the marketplace without the use of a mandate.
Similarly, the best public policy on EFNG is not to have the government (state or federal) subsidize the EFNG industry or technology in any way, but to simply allow private industry to invest in it based on the merits of the technology and its viability in the current energy market. That being said, in the current energy marketplace, EFNG will not play a major role as a transportation fuel as it has no thermodynamic or ecologic merit, and is simply too expensive. Private investors will instead find more efficient uses for their funding, and better ways to use natural gas for transportation, electrical generation, and as a manufacturing feedstock.