Is Ethanol in America’s Future? Experts Discuss at Aspen Institute

Three leading energy industry experts led a conversation on the potential of ethanol at the Aspen Institute headquarters in Washington, DC, March 30. Red Cavaney, president and CEO of the American Petroleum Institute; Nathanael Greene, senior energy policy specialist at the National Resources Defense Council’s Air and Energy Program; and Jim Woolsey, former director of the CIA and VP in Booz Allen Hamilton’s Global Resilience practice, talked about the future of biofuels as a replacement for gasoline in the US. Hosted by The Aspen Institute Program on Energy, the Environment, and the Economy (EEE) and Fortune magazine, the lunchtime discussion was sponsored by Cinergy and moderated by EEE director Jack Riggs and Fortune senior writer Adam Lashinsky.

Cavaney, Greene, and Woolsey were joined by about 40 other leaders in the discussion, which covered the long-term sustainability of ethanol, strategies for aggressive growth in the industry, and obstacles, such as costs and a shortage of filling stations with ethanol pumps. “We are at the threshold of some developments in alternative fuels that could change the way we think of vehicular transportation forever,” said Woolsey, who emphasized the renewable and clean-burning E85 fuel blend (85 percent ethanol, 15 percent gasoline) as an important prospect and possibly a golden ticket for the US.  Greene added that Brazil — where almost 75 percent of new cars are built with the option of burning either ethanol or gasoline, and where ethanol accounts for more than 40 percent of car fuel —is an example of how to move quickly from using ethanol as a fuel additive to using it as a fuel alternative. “What is going on there represents the power of consumer choice and is going to transform the market,” said Greene. Cavaney said that oil companies are committed to developing this market too, but rather than moving quickly to E85, which reguires separate pumps and distribution systems, “We think the quickest way to grow the ethanol market”. “is to maximize integrating ethanol into the national gasoline pool.” At the roundtable, Paul Ho, director of the Energy Group at Credit Suisse First Boston, said “Wall Street is crazy about renewable energy these days, particularly ethanol... The country doesn’t even need E85 in order for the ethanol industry to stand on its own.” Other roundtable participants included Dennis Fitzgibbons, director of Public Policy for DaimlerChrysler; Joseph Lipscomb, managing director of the Global Environment Fund; Christopher Schepis of the National Farmers Union; Aaron Brickman of the US Department of Commerce; Jackie J. Gleason of the US Department of Agriculture; and Lawrence Russo of the US Department of Energy.