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A Brief History of Biofuels

RP Siegel | Monday October 1st, 2012 | 4 Comments


Everything we burn or have ever burned for fuel originated as a living thing. It either started out as a plant, gathering energy from the sun and pulling carbon dioxide out of the air to store that energy, or else it was an animal that ate that plant (or ate the animal that ate that plant). In one sense, all fuel is biofuel, however, we generally reserve the “biofuel” designation for material that was recently living – to distinguish it from fossil fuel.

Biofuel has been the “fuel of the future” in this country for at least a hundred years now. Its promise as a clean, renewable, domestically available fuel has long been recognized. Back in 1917, Alexander Graham Bell made the following observation in National Geographic, “Alcohol makes a beautiful, clean and efficient fuel. Alcohol can be manufactured from corn stalks, and in fact from almost any vegetable matter capable of fermentation…We need never fear the exhaustion of our present fuel supplies so long as we can produce an annual cop of alcohol to any extent desired.”

But despite its promise, alcohol as a fuel has had its challenges.  Throughout its history, biofuel producers have fought a mostly losing battle with petroleum-based fossil fuels, vying for subsidies and preferential tax treatment. Because of its larger political and economic clout, the fossil fuel industry has generally held the upper hand, though that could be starting to change.

It wasn’t always that way. Going back to the 1820s, a blend of camphene and alcohol was the dominant fuel for lamps, as much as 100 million gallons a year were sold, almost ten times the volume of the more expensive whale oil. Many farmers had their own stills that they used to make lamp oil (and other things) from crop wastes. That all came to an abrupt end in 1862, when a $2 per gallon tax was assessed on alcohol to help finance the Civil War. But somehow, kerosene, or coal oil, as it was called then, was taxed at only ten cents a gallon. By 1870, kerosene was selling over 200 million gallons a year.

The alcohol tax was repealed in 1906 by Teddy Roosevelt, saying, “The Standard Oil Company has, largely by unfair or unlawful methods, crushed out home competition…It is highly desirable that an element of competition should be introduced by…putting alcohol…upon the [tax] free list.”

This back and forth trend would continue over the next century.

Biofuel’s roots run deep into the earliest automotive days. The first internal combustion engine in the U.S. was built by Samuel Morey who used it to power a small boat up the Connecticut River in 1826. He fueled it with a mixture of turpentine and alcohol.

German inventor Nicolaus August Otto is generally credited with inventing the first automobile engine. The four-stroke internal combustion engine he developed in 1876 used alcohol, which was plentiful and untaxed in Europe, as the fuel. Rudolph Diesel demonstrated his first engine in 1900 running on peanut oil. The Ford Model T, which first came out in 1908, was also designed to run on ethanol.

But somehow the “unseen hand” gave  gasoline prominence. By 1920, there were 9 million gasoline-powered vehicles on the road.

Biofuels tried to make a comeback in the 1930s in the form of gasoline blends. Agrol, of Atchison, Kansas (now Midwest Grain Products) was backed by Ford but opposed by the oil companies. At one point there were 2,000 stations across the Midwest, but the company went bankrupt in 1939. During the war, ethanol was primarily used to make 75 percent of all synthetic rubber, which was in high demand. Ethanol was also used as an aviation fuel.

After the war, gasoline became so cheap that ethanol disappeared from the market altogether, until the oil embargoes of the 1970s. With the gas shortages and long lines at the pumps, interest in alternative fuels was rekindled. Professor Thomas B. Reed of MIT was an outspoken advocate for the development of new fuels, but his research was canceled under pressure from Exxon, a major contributor to the school. Nonetheless, “gasohol,” a blend of gasoline and alcohol become widely available during that decade, encouraged by a tax credit of 58 cents a gallon.

Once gasoline prices fell, interest in ethanol once again waned, and the tax credit was reduced, in 2005, to 47 cents a gallon.

More recently, concerns about dependence on foreign oil, as well as awareness of climate change have worked their way onto public and government agendas, resulting in a number of actions that have opened the doors for a resurgence of biofuels.

In 1992, the Energy Policy Act required car makers to offer models capable of using alternative fuels. In 2006, the Renewable Fuels Standards (RFS) Program encouraged the use of ethanol and biodiesel with the goal of doubling their use by 2012. In 2007, the Energy Independence and Security Act (EISA) required the incorporation of 15 billion gallons of ethanol into the fuel supply by 2015 and 36 billion gallons by 2022. EISA also puts a cap on the amount of corn that can be allocated for fuel at 15 billion gallons so as not to overly interfere with the food supply. Much of the rest is expected to come from cellulosic ethanol, which has been slow coming on line with the remainder coming from biodiesel and other unspecified advanced biofuels that might include algae or other organisms.

While the future of our energy supply is altogether uncertain, it seems clear that biofuels will play a key role. Overall, biofuels contribute over 20 percent of all renewable energy consumed in this country. Other than hydro-electric power (35 percent), it is the largest single contributor, about the same as wood, and slightly more than wind. We will further explore the role of biofuels in the emerging energy picture as well as a number of issues regarding its production and use in the forthcoming series.

[Image credit: Michigan State University Archives & Historical Collections]

Thanks to Bill Kovarik.

RP Siegel, PE, is an inventor, consultant and author. He co-wrote the eco-thriller Vapor Trails, the first in a series covering the human side of various sustainability issues including energy, food, and water in an exciting and entertaining format. Now available on Kindle.

Follow RP Siegel on Twitter.


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  • Verne_J_Hostan

    NIce article on bio-fuels – once more we are confronted with corporations and government gaming the system to the detriment of us all. Minor exception to the notion that all fuels are of organic origin; nuclear reaction of course, however even within the hydrocarbon area, there is a good deal of evidence to suggest deep-earth processes produce methane and its cousins. Also, hydrogen and oxygen can be electrically disassociated from plain water, and recombined to yield clean energy. These atoms can also be assembeld with carbon to yield hydrocarbons of whatever flavor is required. It would have been more accurate to state that all energy stems from atomic combustion, and that biofuels are intermediaries. Our current situation is akin to the industtrial revolution, when coal was used to power the factories and pollute the environment in a manner never seen. Only a lack of scientific knowledge stands between us and plentiful non-polluting energy – the trick is to keep corporations and government from retarding scientific progress.

    • RPSiegel

      The intervention of government and industry can certainly be a double-edged sword as this history shows. Government’s “gaming of the system” is supposedly done in the name of the common good, while industry’s efforts tend to be more self-serving. That’s all fine if the appropriate checks and balances are in place. But too often the government interventions are done on behalf or corporations at the behest of their lobbyists and the cash and the promises they wield.

  • Dave Shires

    Good article.

    I’m a little skeptical that it’s *only* government subsidies that have kept petroleum on top. I mean, I suspect that is certainly the case right now – heck, we just spent a Trillion dollars securing Iraq’s oil.

    But I think petroleum originally rose to prominence because it was simply cheaper, no?

    Today – we’ve got all kinds of insane politics standing in the way, not the lease of which are tariffs on Cuban and Brazilian sugarcane which could do wonders for our biofuel needs if we weren’t so hell bent on subsidizing corn – a much less useful crop in terms of biofuel potential – correct me if I’m wrong!

    • RPSiegel

      Cheaper yes, but maybe not so simply cheaper. Subsidies and tax breaks have played a role. That being said, it is technically superior in terms of energy content and probably easier to pump out of the ground and pipe to refineries, at least when it was reasonably accessible, than to grow, harvest, transport and distill. There are other crops with higher energy content than corn, though corn does grow very productively.