45 years of AgriNews: From ‘gasohol’ to over 15 billion gallons

Editor’s Note: AgriNews is celebrating its anniversary by reviewing some of the top agricultural issues over the past 45 years.

ELLISVILLE, Mo. — Ethanol has been used as an energy source for nearly 200 years, but when the oil crisis hit in the 1970s it took interest in the corn-based product to the next level.

The concentration of oil power in the 1970s shifted from the U.S. and its close allies to the Middle East.

In October 1973, members of the Organization of Arab Petroleum Exporting Countries proclaimed an oil embargo “in response to the U.S. decision to re-supply the Israeli military” during the Yom Kippur War. OAPEC declared it would limit or stop oil shipments to the U.S. and other countries if they supported Israel in the conflict.

The embargo was lifted in March 1974, but it immediately sparked the notion of blending ethanol with gasoline.

The embargoes and ongoing uncertainties in the global oil market led to pressure on the U.S. Environmental Protection Agency to address energy security. The agency agreed to allow a 10% ethanol blend in gasoline in 1978. That same year, the Energy Tax Act was passed, providing a partial exemption for ethanol from federal motor fuel taxes.

One may say ethanol went mainstream when television viewers saw Bob Hope’s 1979 commercial promoting Texaco’s gasohol, a mixture of 90% unleaded gasoline and 10% ethanol “made from renewable crops like corn. Gasohol can’t replace our gasoline, but it can help stretch our available supply.”

The ethanol industry produced 500 million to 700 million gallons per year in the 1980s and expanded to 2 billion to 3 billion in the 1990s. With a boost from state and federal policies, the 21st century saw production rise even more dramatically, reaching 15.02 billion gallons last year.

Over The Years

Here are among other important developments in the ethanol industry the past four-plus decades:

• 1984 — Congress includes a 6-cent per gallon federal tax exemption for ethanol fuels.

• 1990 — Clean Air Act Amendments establish reformulated and oxygenate gasoline programs for metro areas with air-quality issues.

• 1993 — Annual ethanol production surpasses 1 billion gallons, and the average ethanol blend tops 1% for the first time.

• 1995 — National reformulated gasoline program begins in one-third of the U.S. fuel market, opening new markets for ethanol as an additive to help clean the air.

• 1996 — U.S. automakers begin mass production of flex-fuel vehicles capable of running on up to 85% ethanol.

• 1998 — States begin banning the use of MTBE, which was found to be contaminating groundwater.

• 2005 — President George W. Bush signs the Energy Policy Act into law, creating the first-ever Renewable Fuel Standard. The RFS required increasing the amounts of biofuel to be blended into the fuel supply up to 7.5 billion gallons in 2012. The ethanol tax exemption transformed into the Volumetric Ethanol Excise Tax Credit.

• 2007 — RFS is expanded with the signing of the Energy Independence and Security Act. With the addition of the advanced and cellulosic biofuels, the RFS was raised to 36 billion gallons of renewable fuel by 2022, including 15 billion gallons of corn-based ethanol production. The average ethanol blend rate hits 5%.

• 2011 — EPA approves blends of 15% ethanol in gasoline for use in model year 2001 and new passenger cars and light trucks. The U.S. ethanol industry becomes a net exporter as exports top 1 billion gallons for the first time.

• 2016 — Ethanol consumption breaks the “blend wall,” comprising of more than 10% of the nation’s gasoline.

• 2018 — U.S. ethanol production reaches 16.1 billion gallons.

• 2020 — At the peak of the global COVID-19 pandemic lockdowns, over half of the ethanol industry’s capacity was shuttered and roughly three-fourths of ethanol plans were offline or generating at reduced capacities.

• 2021 — U.S. Energy Information Administration data found that ethanol comprised a record share of America’s gasoline in 2021, averaging 10.34% of every gallon sold. The U.S. ethanol industry produced 15.02 billion gallons in 2021, an 8% increase over 2020 and the largest annual volume growth since 2010. Domestic ethanol consumption grew even faster, jumping 1.26 billion gallons over 2020 levels — a 10% increase. Meanwhile, U.S. ethanol exports dipped slightly from 2020 levels, but still registered as the fifth highest on record.

The Renewable Fuels Association has been a key player in the expansion of ethanol and policy since its formation in 1981. RFA held a year-long celebration of its four decades in 2021.

“The 40th year celebration really gave us an occasion to stop and pause and reflect and celebrate some of the big accomplishments of both the Renewable Fuels Association and the ethanol industry over the past 40 years. Really what we came to realize is the story of RFA the past four decades is really the story of the ethanol industry itself,” Geoff Cooper, RFA president at CEO, said in an AgriTalk episode posted on the RFA website.

“Back in 1980, 1981, there were just a handful of very small ethanol plants that were making renewable fuel, far less than a couple 100 million gallons. It really reminded our members and really the entire industry that this association has been there for every major development in the marketplace and certainly in terms of policy over the past four decades.

“For four decades strong, RFA’s member companies have worked together to move the renewable fuels industry forward. Whether innovating new technologies, shaping policies and regulations, or opening new markets, RFA’s members remain at the forefront of the low-carbon bioeconomy.

“This record of achievement was underscored in 2021, as RFA saw a record number of new member companies join the association. We welcome them to the team and look forward to working together to chart the industry’s course for the next 40 years and beyond.”