Ethyl alcohol can be made from any commodity containing
starch or sugar, including sorghum, barley, grasses, and even paper:
The U.S. Postal Service has investigated converting undeliverable
mail to ethyl alcohol. Corn is the primary commodity used in the
U.S., however, because, in this country, it is the least costly
way to generate starch. In 2003/04, 1.2 billion bushels of the 10.1-billion-bushel
corn crop was used to produce ethyl alcohol, up 23 percent from
2002/03, which itself was a 36-percent rise from 2001/02.
Why the increase in ethyl alcohol production? Ethyl
alcohol has a number of industrial uses, including use as a drying
agent in perfumes and aftershave lotions. Accounting for most of
the growth in use, however, is the production of ethanol—a
blend of ethyl alcohol and gasoline. Motor vehicles using gasoline
containing ethanol can reduce carbon monoxide emissions. In 1978,
to encourage greater production and use of ethanol, policymakers
passed legislation creating a “blender tax credit,”
which effectively reduces the price consumers pay for ethanol. In
addition, the requirements of the Clean Air Act amendments have
prompted some States, including California, Connecticut, and New
York, to switch to using ethanol as an oxygenate in gasoline, because
it is less damaging to the environment than other oxygenates.
Most ethyl alcohol used in the U.S. is produced domestically:
U.S. capacity is currently estimated at 3.6 billion gallons per
year. However, sharp increases in U.S. ethanol use this past year
pushed prices high enough to stimulate imports, despite duties matching
the blender tax received by U.S. producers of alcohol used for fuel.
Among the largest suppliers are the countries of the
Caribbean Basin Initiative, which are exempted from duties on any
ethanol produced from regional feed stocks to stimulate economic
growth in this region. Another large supplier is Saudi Arabia, which
produces alcohol from ethylene gas, a byproduct of petroleum refining.
But the largest supplier in 2003/04 was Brazil, which
began producing ethyl alcohol from sugar to cut petroleum imports
after petroleum prices rose in 1973. The Brazilian Government specifies
the percentage of alcohol to be included in gasoline, depending
on sugar prices, and encourages the production of automobiles that
run on alcohol.
Brazil’s future in the U.S. ethanol market will
depend on infrastructure developments, petroleum prices, and the
price of sugar versus corn. Brazil recently announced plans to improve
infrastructure to facilitate export loading and to cut time and
costs in ship loading. But petroleum prices near $50 per barrel
have boosted Brazilian demand for ethyl alcohol, basically eliminating
exports to the U.S.
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