A crash gasohol program using surplus American grain hangs on two crucial points: To what degree will Congress finance the undertaking, and how quickly will private companies go into the business?
The White House was expected to unveil its promised gasohol program this week , calling for a dramatic increase in the building of new factories and the use of surplus capacity in existing refineries.
President Carter said in his Jan. 4 television speech that the 17 million tons of grain made available by his cancellation of its sale to the Soviet Union would be used in such a program.
A Department of Energy (DOE) official who has been researching gasohol for three years says that, with a concerted effort, 500 million gallons a year of gasohol can be produced. That is the same amount Deputy Secretary of State Warren M. Christopher mentioned Jan. 7.
"Clearly, it would take more than a year to bring new plants on line," syas Dr. Les Levine of the DOE. "But some people have already started building, and other people have distillery capacity for it. It is very ambitious but not impossible."
A bill to provide incentive money for private businesses to begin gasohol operations under a proposed energy security corporation is pending in a congressional conference committee. The DOE, specialist admits that any executive branch announcement of a crash program to produce gasohol would be dependent on congressional financing.
Gasohol enjoyed a burst of publicity last summer as gasoline lines sprang up around the country. It remains atractive to the Carter administration for several reasons, one of which now is that it would put the embargoed grain to use, thereby placating Midwestern farmers.
A number of major oil firms began marketing gasohol last summer, much of it produced by Archer-Daniel Midland, a Decatur, Ill., grain refiner which is operating at plant capacity. (The company's stock hit a new hig on the New York Stock Exchange Monday.)
Gasoline substitutes other than ethanol are being examined by several oil companies, including Mobil and Atlantic Richfield.
In producing gasohol, ethanol is derived from grain distillation and mixed in a 1:9 ratio with standard gasoline. The mixture burns cleanly and with a high octane rating, which means it would be used primarily as a substitute for unleaded premium gasoline.
Assuming a crash program is launched, the official says it will be five years before it has a discernable impact on the gasohol supply.
An investment analyst gives several reasons why he is skeptical of gasohol's longterm viability. Leonard Bogner, vice-president and chemical analyst of Bache Halsey Stuart Shields Inc. of New York, says the energy required to produce one gallon of ethanol from grain is 139,000 Btus, but the resultant alcohol has a heating value of only 90,000 Btus.
"Hence," Mr. Bogner says, "there is no energy savings in gasohol."
The energy loss could be compensated for, scientists say, by using waste heat , geothermal, solar, or other forms of readily available energy to produce ethanol.
Overhead and transportation costs would be low for ethanol distilleries, which could be built in farm areas.
Mr. Bogner says that if the US decides to cut all future grain deals with the Soviet Union, gasahol production might be the only way of using the surplus grain.