Today, alternative fuels such as ethanol and biodiesel, are emerging as the renewable fuels of the future. New requirements for reformulated gasoline, particularly in California, have found that the gasoline additive MTBE no longer meets requirements and that its usage may be an environmental hazard. In California, the state air quality board is requiring the removal of MTBE additive from gasoline by January 1, 2004, making ethanol a likely substitute. The unfortunate controversy surrounding MTBE may present new opportunities for the ethanol industry nationwide in the future.
The renewed interest in ethanol has prompted IIR to develop an exclusive Ethanol Production Package to track the new developments occurring in the industry along with current and future plant production capacities, contact information and capital spending data. Currently IIR is tracking over $4.7 billion in capital spending to take place over the next 3 - 5 years that will more than double the current capacity of today’s ethanol production capabilities. In the year 2002, some 2.1 billion gallons were produced in the U.S. That market is expected to grow to more than 3.2 billion gallons per year by 2004.
Biodiesel, also known as methyl esters, is another renewable fuel that is derived from new and used vegetable oils. Recent interests in biodiesel have come forth after discovering that when a mixture of 20% bidiesel is blended with standard petroleum diesel fuel, sulfur content can be reduced down to acceptable levels. In its pure form, biodiesel can also be used as a fuel source in most combustion engines that accept diesel fuel. In the future, further interest could find applications for this product in the commercial market. Today, biodiesel fuel production represents 61 million gallons per year. As demand grows, production is projected to reach over 100 million gallons per year within the next few years.
Published in May of 2001 the Bush administration national energy policy report supports alternative energy fuel programs for the future. Currently President Bush’s bioenergy stimulus package before congress is intended to reduce the U.S. dependence of foreign oil by 0.5%, while increasing the use of alternative fuels by 0.5%. Alternative fuel producers are anticipating a greater role for ethanol and biodiesel fuels through 2005 and beyond. It is forecasted that the market for renewable fuels could boost the U.S. economy by $300 billion and create as many as 300,000 new jobs by 2016.
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