Page 4 RAIN October 1980 ll•Ca ©Hal Bemton We're fortunate to have Hal Bernton write this article for us. A former researcher for newspaper columnist Jack Anderson, Hal has been working for some time on a book (due out in the spring) on th~ history, economics, and environmental impact of alcohol fuels. Hzs r~search has taken him not only all around the country but to Brazzi, where vast amounts of land and capital are being channeled into a massive alcohol development program. Currently he is working for the Washington Small Farm Resources Network (19 East Poplar, Walla Walla, WA 99362, 509/529-4980) to coordinate an ethanol fuel development program in the Skagit Valley. -MR Alcohol-Powered America In recent months the Carter Administration has begun to implement a series of major federal initiatives to expand production of alcohol fuels in the 1980s. By the end of the decade the White House would like to see 10% of the nation's gasoline consumption replaced by alcohol fuels. Some 1.2 billion federal dollars in loan guarantees, price guaran-: tees, and purchase agreements to stimulate distillery construction are beginning to flow into the private sector. An eight-year extension ·of a generous 4 cent-a-gallon exemption for 10% gasohol blends from federal excise taxes (which w_orks out to a 40 cent-agallon tax break for alcohol undiluted with gasoline) has been approved by Congress. All of this activity has been accompanied by a series of pamphlets, reports, and magazines released by various federal agencies which now extoll the virtues of an alcohol-powered America. The strong federal push to promote both ethanol (which is derived from starch or sugar-rich organic materials) and methanol (derived from cellulosic-rich wood and crop materials) has evolved in a surprisingly brief span of time. Just four years ago these fuels were viewed by the Carter Administration's top energy officials as marginal resources to be taken seriously only by a handful of farmbelt fanatics who were eager to bolster sagging crop markets by converting surplus grains into ethanol. But the so~ring popularity of gasohol crested with the gasoline shortage of 1979 and persuaded a politically sensitive White House to abruptly back rapid development of alcohol fuels. A strong federal effort to increase alcohol fuels production is al.:. most certain to continue well into this decade regardless of who takes up residence in the White House next January. Ronald Reagan has spoken out strongly in favor of gasohol in his syndicated radio commentaries, and John Anderson comes from Illinois, where gasohol has been elevated to a status usually reserved only for motherhood, apple pie and the American flag. With gasohol sales booming at service stations across the country, most of the major oil companies have ceased efforts to block development of the new industry and are now trying to figure out • ways to break into it. The infant gasohol industry is currently dominated by Archer Daniels Midlands, a large multi-national food processing corporation headquartered in Decatur, Illinois. • • Archer Daniels Midland (ADM) set up a fuel grade distillery at its sophisticated Decatur corn milling facility in the spring of 1978 and began converting starchy waste streams into 199-proof anhydrous ethanol. This ethanol was marketed to a network 0£ independent midwest service stations for $1 .30/ gallon (production costs initially stood at about $.95/gallon). Thanks ~n part to the federal tax breaks which kept gasohol competitively priced with unleaded gasoline, demand for ADM's production soared, 'far outstripping the available supply. By the spring of 1980,ADM had jacked the price of a gallon of 199-proof fuel to over $1.80.
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