Background
 The use of ethanol as an automobile fuel in the United
 States dates as far back as 1908, to the Ford Model T.
 Henry Ford was a supporter of home-grown renewable
 fuels, and his Model T could be modified to run on either
 gasoline or pure alcohol.3  Ethanol was used to fuel cars
 well into the 1920s and 1930s as several efforts were
 made to sustain a U.S. ethanol program. Standard Oil
 marketed a 25-percent ethanol by volume gasoline in the
 1920s in the Baltimore area.

 Ford and others continued to promote the use of ethanol,
 and by 1938 an alcohol plant in Atchison, Kansas,
 was producing 18 million gallons of ethanol a year, supplying
 more than 2,000 service stations in the Midwest.4 
 By the 1940s, however, efforts to sustain the U.S. ethanol
 program had failed. After World War II, there was little
 interest in the use of agricultural crops to produce liquid
 fuels. Fuels from petroleum and natural gas became
 available in large quantities at low cost, eliminating the
 economic incentives for production of liquid fuels from
 crops. Federal officials quickly lost interest in alcohol
 fuel production, and many of the wartime distilleries
 were dismantled. Others were converted to beverage
 alcohol plants.5  [Page 2]
 -----snip-----
 The two most common methods to increase the
 oxygen level of gasoline are blending with MTBE and
 blending with ethanol. Because ethanol has a higher 
 oxygen content than MTBE, only about half the volume
 is required to produce the same oxygen level in gasoline.
 This allows ethanol, typically more expensive than
 MTBE, to compete favorably with MTBE for the wintertime
 oxygenate market. Unfortunately, ethanolās high
 volatility, measured by Reid vapor pressure (Rvp), limits
 its use in hot weather, where evaporative emissions
 can contribute to ozone formation. Nevertheless, ethanolās
 expanded role as a clean-air additive has allowed it to
 penetrate markets outside the Midwest (Figure 2).  [Page 2]
 -----snip-----
 Pure Energy is also
 developing a new fuel called OxyDiesel, composed of 80
 percent diesel fuel, 15 percent ethanol, and 5 percent
 blending agent to raise cetane levels.11  The company has
 developed an additive system to prevent water absorption
 for a stable ethanol-diesel mixture that can be
 shipped through a pipeline.12  Currently, fuels blended
 with ethanol cannot be shipped in multifuel pipelines,
 because the moisture in pipelines and storage tanks is
 absorbed by the ethanol, causing it to separate from gasoline.
 Rather, the petroleum-based gasoline components
 have to be shipped separately and then blended with ethanol
 at a terminal as the product is loaded into trucks.  [Page 3] 
 -----snip-----

 [Available from] 
 Outlook for Biomass Ethanol Production and Demand
 by Joseph DiPardo  (Completed Apr/2000)
 US US Energy Information Administration - DOE
 http://www.eia.doe.gov/oiaf/analysispaper/pdf/biomass.pdf PDF

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