Automotive Fuel History: Why Gasoline Beat Alcohol

Julian Girard
December 8, 2015

Submitted as coursework for PH240, Stanford University, Fall 2015

Introduction to the Conflict

Fig. 1: The Fuel Alcohol Production Process. (Source: J. Girard)

In the modern age, fuel is power. Our global societies still depend significantly upon energy reserves in the form of fossil fuels, most notably petroleum-based fuels such as gasoline, to develop themselves and prosper. In the context of ever impinging climate change and frequent hostility in oil-rich regions of the world, alternative fuel choices have become increasingly necessary. Among the several options for renewable, clean, and efficient energy sources is one that, ironically, has been around for well over a century. [1] This essay will explore the history of this automotive fuel, once dubbed 'The Fuel of the Future' by Henry Ford, in the United States and outline the primary reasons it has not been - and might never be - the substitute for gasoline we so desperately need. [1] Ethyl alcohol or ethanol, which can be produced from just about any farm product including corn, has been widely promoted in our country at least 3 times in its history, though it has never quite reached the potential it promised.

By modern standards, ethyl alcohol is a strong fuel that has found success in several other countries such as Brazil because of its many advantages; it burns clean, it has a very high octane rating compared to gasoline, and it can be produced from renewable waste products. The reasons alcohol has failed as an automotive fuel in the United States on more than one occasion are quite straightforward. While ethanol is a strong alternative to gasoline, the gasoline industry in our country is powerful and generally against fuel competition. Additionally, and more to the point, gas has always been a little bit cheaper. [1]

Discovery of Petroleum

Before the discovery and commercialization of kerosene in the United States in the 1860's, the fuel of choice was a blend of alcohol, usually methanol, and turpentine called camphene. [1] For most of the 19th century, alcohol based fuels such as camphene were used almost exclusively as burning fluids, and alcohol saw great success in this era as a relatively cheap alternative to the whale fat and other lard oils used previously. [1] Kerosene produced from petroleum entered the lamp fuel market at the perfect moment, as with the passing of the Internal Revenue Act in the early 1860's, alcohol in all forms was taxed very heavily. [1] This measure destroyed the chances of camphene to compete in the market of the day. As a result of the federal alcohol tax, petroleum based fuels were in sense incentivized and so dominated in the United States through the end of the 19th century. Until the Civil War alcohol tax, which was still in place in the late 1890's, was lifted there would be no chance for ethyl alcohol to prosper in United states as an automotive fuel choice as it did in several Western European nations seeking to boost agricultural production, such as France and Germany. [1] Ethanol was actually a compatible fuel for most internal combustion engine designs and therefore assumed the role of direct competitor with petroleum-based automotive fuel, or gasoline. In 1906, Theodore Roosevelt, in a move to place a check on the dominant petroleum industry, lifted the alcohol tax in the United States. [1]

Farm Chemurgy

Following the lift the alcohol tax in 1906, there was much promotion, both by the federal government and the national media, of ethyl alcohol fuels as a promising and cheap alternative to petroleum-based fuel (at the time ethanol from corn was quoted by the New York Times as up to 60 percent cheaper than gasoline). [1] According to Senator Champ Clark, who served in the early 1900's, oil producers such as Standard Oil were publicly against the "free alcohol" bill and supported retaining the alcohol tax. [1] Interestingly, automobile manufacturers supported ethyl alcohol as an alternative to gasoline, as most manufacturers designed their engines to run on pure alcohol fuel, in addition to gasoline and any composite blends. Ethyl alcohol was widely considered as preferable to gasoline because it was relatively clean burning and because alcohol markets would be far less volatile than those of gasoline as a result of the the renewable nature of its source. [2] Despite the original praise of ethyl alcohol and its promise as a gasoline alternative, it largely failed in the early 1900's. Fewer alcohol distilleries than expected were built, and as a result of low supply, prices became non-competitive. The discovery of plentiful oil reserves in Texas in the early 1900's re-established gasoline as the fuel of choice in the United States. [1]

Much research was conducted in the United States and internationally on ethyl alcohol, aimed at characterizing its performance relative to gasoline. [2] Many of the technical benefits of alcohol resulted from it high octane rating, which prevented engine knocking (a common problem in automobile engines running on pure gasoline) and also increased the the the maximum operational engine pressure ratio, thus increasing maximum horsepower generation. Some problems that were noted were trouble starting, low volatility, and sensitivity to moisture, though these were generally considered minor drawbacks in comparison to the benefits of a higher octane rating. [2] Despite the significant scientific support generated, forces in favor of petroleum such as the American Petroleum Industries Committee were able to paint ethanol as an entirely inferior fuel in front of Congress on multiple occasions. The result was that the oil industry was able to block up to 40 state and federal bills supporting alcohol-gasoline tax incentives and blending programs during the 1930's. [2] The alcohol-blending support revived in the 1930's following the promising results of ethyl alcohol research (dubbed farm chemurgy)was stamped out not by free-market competition, or by lack of supply as in past instances, but by political and questionable business practices carried out by the industries it threatened. Besides the political lobbying against alcohol fuel incentives and blending programs, some companies, such as Ethyl Corp., went as far as denying contracts to petroleum refineries and wholesalers who produced blended varieties of gasoline. [2]

Gasohol and the Revival of Ethanol

The American petroleum industry saw undisturbed success for 40 years after politically discrediting farm 'chemurgists' and their alcohol-blend fuels in the 1930's. [2] In the 1970's, spurred on by increasing price volatility of imported oil supplies from the Middle-East, ethyl alcohol once again found footing. "Gasohol", as the new blend was called, first gained popularity in the American Midwest, which served as the center of ethyl alcohol production. [2] Improvement of distilling technology, as well as renewed interest in American motorists for a cheap and clean fuel that could eliminate American dependence on OPEC oil, gave the gasohol industry the kick start it needed. [1] A powerful Gasohol lobby formed in the late 1970's managed to gain influence in Washington and guarantee federal support of the gasohol industry, even after election of Ronald Reagan, who supported synthetic fuels over renewable ones, and was famous for his extensive funding cuts in 1981. [1] Despite the positive outlook for gasohol in the early 1980's, national support of the industry became tarnished by concerns over the renewability of its source. 'Food vs Fuel' became a common phrase associated with gasohol opponents, who claimed America's heartland was being overworked and it's bounty being used for the production of fuel, which would only spike the prices of produce. America began to fear a farmer 'mafia'; a made-up organization seeking to monopolize both the fuel and grain industries. [1]

Ultimately, the gasohol industry has survived and gradually gown up to the twenty-first century, primarily as an octane-booster in gasoline, and recently gaining popularity with the advent of 'flex-fuel' capable vehicles and increasing American demand for fuel-choice in the midst of record oil price fluctuations. According to the the Annual Energy Review, Ethanol consumption, primarily as an automotive fuel octane booster, has increased from 7 trillion BTU in 1981 to 1091 trillion BTU in 2011. This is in contrast to an increase in petroleum consumption in transportation from 9.487 million barrels per day in 1981 to 13.223 million barrels per day in 2011. This means that since 1981, the growth of the ethyl alcohol industry is 393.23 times that of the transportation petroleum industry. [3]

Future of the Industry

The ethyl alcohol industry is an older one than that of gasoline, though as an automotive fuel it has never been as successful. Ever since the pre-Civil War tax on alcohol was lifted in 1906 with the help on an anti-oil Roosevelt administration, ethyl alcohol has been promoted as a clean, cheap, renewable, and powerful alternative fuel to gasoline. Due to economic difficulties, political blockades, and fierce adversaries, ethanol never saw the success in the United States that some believed it should have had. Brazil stands as the best example of the potential for ethyl alcohol to lift an enormous economy out of dependence on international petroleum imports and establish itself has a largely self-sufficient powerhouse nation. [1] But Brazil also teaches us that there is a cost to revolutionizing an entire nation's fuel industry, as Brazilian President Geisel and his National Alcohol Program were able to do in the 1970's following OPEC oil price hikes and a national sugarcane surplus problem. [1] Specifically, the cost is the free market principle, which normally would not allow an inferior fuel to take over. As long as the priority of the American people in fuel choice is price, they will continue to fill their cars with gasoline. Without an extreme shortage of gasoline in the near future, it is likely that 'The Fuel of the Future' will be surpassed by a more promising, and ultimately cheaper alternative to gasoline.

© Julian Girard. The author grants permission to copy, distribute and display this work in unaltered form, with attribution to the author, for noncommercial purposes only. All other rights, including commercial rights, are reserved to the author.


[1] H. Bernton, W. Kovarik, S. Skylar, The Forbidden Fuel: A History of Power Alcohol (Bison Books, 2010).

[2] C. B. Gray and A. R. Varcoe, "Octane, Clean Air, and Renewable Fuels: A Modest Step Towards Energy Independence," Texas Review of Law and Politics 10, No. 1, 9 (Fall, 2006).

[3] "Annual Energy Review 2011," U.S. Energy Information Administration, DOE/EIA-0384(2011), June 2011.