Chart updated 28 February to take account of this comment from Profbaldwin.

The future of motor vehicles lies in improved efficiency and that is to the left of the gasoline ICE in the chart. That future is electric vehicles powered by high ERoEI renewable electricity.

I sometimes have to pause and remind people that I am not anti-ethanol. I think I first made that clear over two years ago with my support for E3 Biofuels' attempt to produce corn ethanol in a more sustainable fashion. They were attempting to create a closed-loop system that minimized fossil fuel inputs into the process, but they ultimately went bankrupt (the move toward sustainability isn't cheap). But politics being what they are, corn ethanol is not going away. So I do appreciate it when efforts are made to push the process toward higher sustainability. I believe corn ethanol can be sustainably produced, but probably not on a massive scale. It will also take a radical shift away from the way most corn ethanol is produced today.

What I want to focus on in this essay is one particularly compelling argument for ethanol as a fuel, and to address some common misconceptions. Ethanol has a high octane rating (103), which means it does not easily pre-ignite. This has the potential to translate into higher fuel efficiencies than can be obtained with gasoline – despite ethanol's BTU deficit versus gasoline.

Scaling biofuels from the level of the laboratory or pilot-plants to commercial production is the Achilles’ Heel of almost all biofuels. One major problem is that biofuels use feedstocks that are invariably less energy dense than their fossil fuel counterparts. For example, there are approximately 45 MJ per kilogram contained in both the finished product of gasoline and crude oil, while ethanol has an energy density of about 26 MJ per kilogram and corn has only 16 MJ per kilogram. In general, this means that large amounts of corn must be grown and harvested to equal even a small portion of our gasoline consumption on an energy equivalent level, which will undoubtedly expand the land area that is impacted by the production process of corn-based ethanol.

Figure 1. Map of the optimal gradient space for the production of corn-based ethanol within the United States. Colors correspond to EROI numbers listed in the figure caption. The grey areas represent locations without a significant amount of corn-production.

One of the considerable differences between the ongoing financial problems of the world, and the coming energy crisis lies in the nature of the commodity of concern. In the first case the problem focuses around money, though not really the physical and tangible cash that one uses less and less to pay for groceries, the rent, or the occasional book. The US has already transitioned to a point that more than half the time we use credit and debit cards to pay the bill. (The quote is from a year ago)

As debit card and credit card purchases become increasingly popular, check and cash payments continue to lose out. These traditional payment methods now account for less than half of all transactions, and a recent rule change by the Federal Reserve Board should tilt the balance even further away from paper transactions and toward plastic payments.

As a result, for the vast majority of us who do not keep our money in the mattress, financial solvency and insolvency is defined by electronic statements about the nature of our accounts, without there being a pile of gold sitting in the bank to define it. And, when the banks and other companies holding such accounts get into trouble, loans can and have been arranged for them, that are similarly electronic transactions, without large trucks pulling up at either Fort Knox, where 147.3 million ounces currently sit, or to the Federal Reserve Bank in New York, that holds about 216 million ounces. Rather the transactions occur electronically, and there is relatively little need for the physical presence of the cash.

Contrast that with the realities of an energy crisis. We cannot heat our homes with the promises of oil, or the electronic transfer of ownership of fragments of a tanker load making its way from Ras Tanura to the Gulf ports. We need the physical presence of the oil, natural gas or wood that we will consume. When we run out, we need to get some more.