Just a year ago, ethanol was the renewable fuel of the moment. Derived mostly from corn grown in America's heartland, ethanol was promoted as a home-grown ticket to energy independence for the U.S. and other oil-importing nations. It played a feature role in the Energy Independence and Security Act (EISA) of 2007, passed by the U.S. Congress in December, which called for a five-fold increase in ethanol production by 2022 and provided tax incentives and grants to ethanol producers.
Today, however, ethanol's prospects look somewhat cloudy. Critics around the world are crying foul over rising food prices. Others contend that it takes more resources to create ethanol than the alternative fuel provides. According to experts at Wharton and elsewhere, ethanol underscores the hazards involved in the development of any new energy source, where failure to understand the broader impact of production can result in unintended consequences.
Anyone who ever drank grain alcohol at a college fraternity party is familiar with ethanol. It is derived from the fermentation of starches in organic matter; corn starch, found only in corn kernels, is the most popular source in the domestic ethanol industry today. But other so-called second generation ethanol sources are gaining favor as new technologies ease their fermentation process. Of the 36 billion gallons of ethanol mandated in EISA by 2022, 21 billion would come from those second generation sources, such as corn stalks, switchgrass (a tall grass native to the North American prairie) and even garbage.
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