Balancing the costs and benefits of biofuels

Jul 09, 2015   | Categories: Biofuels, Energy, Renewable Energy
When biofuels first entered the transportation fuel market, governments and drivers hoped that the new energy source would reduce car emissions.

Biofuels certainly offer the potential to reduce GHG emissions, but evaluating their environmental impact has proved to be a complex issue due to the many variables at play from the field to the pump. We examined this topic in our Fuels for Life report, which provides an informed dialogue on petroleum-based fuels and their alternatives. In addition to a life cycle assessment of environmental impacts of biofuels, analysis of their utility should also consider costs and financial impacts to get a true picture of their benefits and limitations.

Higher cost, lower energy

Drivers are paying more at the pump due to the addition of ethanol to their gasoline. A recent report published by the U.S.-based Manhattan Institute noted that corn ethanol is an expensive alternative to gasoline, adding $10 billion per year in extra fuel costs for U.S. motorists.

The reason for the additional cost lies in part with the lower energy density of ethanol compared to gasoline. Ethanol contains only 76,000 British thermal units of energy per gallon while gasoline contains 114,000 Btu.Balancing the cost of biofuels

In other words, ethanol contains about two-thirds of the energy of a litre of gasoline. Put another way, drivers must use 1.5 litres of ethanol to get the same energy as one litre of gasoline.  This means drivers using ethanol blends need to fill their tanks more often than when driving on gasoline alone.

In the U.S., where the most common blend is “E10” ­‑- 10 per cent ethanol and 90 per cent gasoline – ethanol blended gasoline leads to a three to four per cent efficiency penalty. The higher the ethanol blend, the higher the penalty and added cost.

Overall, the Manhattan Institute pegs the price of ethanol at 2.4 times more than gasoline.

In Canada, biofuel mandates impose ethanol blends of between five and 8.5 per cent, depending on which province you purchase your gasoline. In addition to the added cost at the pump of ethanol use, a 2014 study from the Macdonald-Laurier Institute found that the cost to Canadians of biofuels support programs was between $3.00 and $3.50 for every dollar of social and environmental benefits.

While some environmental benefits will hopefully emerge from the use of biofuels, it’s still important to look closely at the trade-offs, including increased fuel costs, variable environmental performance and impact of land-use change.

For more on energy savings and efficiency, see our posts on improved engine technology and how the gasoline that fuels our cars is getting greener.
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