NOTE: Article originally published October 2002.
As ethanol’s market potential expands because more and more states formally implement bans on the fuel additive MTBE, more and more ethanol production facilities are being built. What’s interesting about this economic development story is the fact that when you compare ethanol plants and gasoline refineries on a per gallon basis you begin to see what a dispersed energy production system looks like. Smaller, more numerous plants that are more rooted in the communities in which they’re located and provide a larger geographic area with economic benefits. According to BBI International, as of September 2002, the U.S. had 67 ethanol plants that had annual production of 2.6 billion gallons per year (an average of 38.8 million gallons per plant). On the other side of the equation are about 145 oil refineries that produce 130 billion gallons of gasoline (an average of 800 million gallons per facility).
Having most of our petroleum eggs in a limited number of baskets seem to present significant risks to our nation’s energy security. Ethanol and other renewable fuels offer a significant advantage and value over fossil fuels because most plants are smaller and they are widely dispersed.