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Ethanol as a Transportation Fuel

Discuss ethanol as a transportation fuel. Identify at least three advantages and three disadvantages of its use. Also, assess the government's policy regarding ethanol and make a recommendation as to whether you feel use of ethanol is a feasible approach to decreasing the amount of oil used to power vehicles.

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? Can be produced domestically from agricultural feedstocks like corn
? Produces up to 50% less pollution than fossil fuels in vehicle use
? It is a renewable energy source

? Net CO2 emissions while better than fossil fuel are far from zero and include the environmental cost of crop cultivation including diesel-powered equipment needed during both cultivation and production phases.
? Expense. Ethanol is more expensive to purchase per gallon than gasoline. Ethanol contains less energy than gasoline meaning fuel economy decreases by up to 20-30 percent.
? Takes arable land useful for food crops out of production

Government Policy Regarding Ethanol -- Points to Consider

The government subsidizes ethanol starting with the the Energy Policy Act of 1978, ranging over that time from between 40 and 60 cents per gallon. See below the history of ethanol subsidy legislation.

1978 Energy Tax Act of 1978 $0.40 per gallon of ethanol tax exemption on the $0.04 gasoline excise tax
1980 Crude Oil Windfall Profit Tax Act andthe Energy Security Act Promoted energy conservation and domestic fuel development
1982 Surface Transportation Assistance Act Increased tax exemption to $0.50 per gallon of ethanol and increased the gasoline excise tax to $0.09 per gallon
1984 Tax Reform Act Increased tax exemption to $0.06 per gallon
1988 Alternative Motor Fuels Act Created research and development programs and provided fuel economy credits to automakers
1990 Omnibus Budget Reconciliation Act Ethanol tax incentive extended to 2000 but decreased to $0.54 per gallon of ethanol
1990 Clean Air Act amendments ...

Solution Summary

Ethanol as a transportation fuel is examined. Three advantages and three disadvantages of its use is determined.