The US biofuels industry must address midstream ethanol distribution bottlenecks if it hopes to deliver next-generation ethanol in a cost-effective manner.
In 2009, a number of giant energy and chemical companies made significant investments in the development of what could be the next source of biofuels: extracting transportation fuel from algae, switchgrass, and other natural substances. Proponents of such second-generation ethanol believe that fuels derived from these substances may be cleaner and more efficient than corn-based ethanol.
But in the United States, next-generation ethanol likely won’t get from the bio-refinery to the retail service station pump in a cost-effective manner unless the biofuels industry can address distribution bottlenecks. Midstream ethanol distribution infrastructure is inadequate today, and next-generation ethanol will face these same challenges unless they are addressed. This year, of course, the industry has fallen under increased stress because of a variety of factors, including lower oil prices, the economic crisis, and delayed government regulations. In addition to these issues, a 2008 McKinsey study of US ethanol infrastructure revealed constraints in distribution that still must be surmounted if the industry is to grow—regardless of the source of the biofuel.
To better understand the challenges to ethanol use in the United States, this interactive highlights the problems prevalent in US midstream ethanol distribution and examines some of the difficulties presented in its shipping and blending.