[Report] How Corn-Blended Gasoline Took Root in the United States

[Current Status of Biofuels in the US]③
Farm → Ethanol Plant → Gas Station: Dense Ethanol Value Chain
Increasing Raw Material Productivity and Reducing Carbon in Production Process... "Affordable and High Performance"

During the oil crisis of the 1970s, the United States sought ways to reduce its dependence on overseas resources. Companies manufacturing automobiles, which consume the most oil, researched how to create more efficient engines or use alternative fuels.

In the late 20th century, the climate crisis became a major issue. Greenhouse gas emissions had to be reduced by any means. Ethanol gained attention in the U.S. largely due to this trend. Additionally, the natural environment was favorable for cultivating corn, the raw material for ethanol, and the government introduced various incentives such as tax benefits, which together helped ethanol grow into a solid industry sector.

Recently, invited by the U.S. Grains Council, I visited corn farms around Nebraska, ethanol production facilities using corn as raw material, and gas station chains that use gasoline-ethanol blended fuels. I examined how the value chain of environmentally friendly energy sources centered on bioethanol is structured and what preparations South Korea should make if it introduces ethanol-blended fuels.

[Report] How Corn-Blended Gasoline Took Root in the United States

Increased Corn Productivity through Precision Agriculture

About an hour and a half by car from Lincoln, the capital of Nebraska, is a corn farm operated by Mike Divan. The corn cultivation area alone is 2,400 acres, and including soybeans, it totals 3,200 acres (12.95 million square meters, approximately 3.92 million pyeong), which is 4.5 times the size of Yeouido. The vast farm, difficult to gauge in size on flat land, is managed by four people including Divan himself.

This is possible because the entire process from planting to harvesting fully grown corn is done using automated equipment. Thanks to so-called precision agriculture, which utilizes data and various automated devices, productivity has increased. The dense rows of corn stalks are spaced exactly 3 inches apart from each other, and the ridges are uniformly 10 inches apart. Planting at consistent intervals per unit area is crucial for even growth, so precise planting is important.

Mike Divan, who operates a corn farm in Nebraska, USA. Including himself, four people manage a 3,200-acre farm.
[Photo by U.S. Grains Council]

Divan said, "We introduced automated equipment such as sprinklers that water at set times about 20 years ago. Before that, we only harvested about 50%, but after installation, efficiency increased to about 85-90%."

The situation is similar at other farms. Corn production in the U.S. has significantly increased compared to the past. Currently, the corn cultivation area in the U.S. is 80 million acres, which has not changed much since the 1980s, but corn production has more than doubled to about 15 billion bushels (a volume unit where 1 bushel is approximately 35 liters). This is due to the spread of precision agriculture across farms and advances in biotechnology.

"Collecting, Utilizing, and Storing Carbon" to Reduce Emissions

Corn harvested on the farm is transported to an ethanol plant about 5 km away. On the 5th (local time), I visited Green Plains Wood River LLC, a facility capable of producing 118 million gallons annually. Large trucks carry corn from nearby farms, undergo simple sample tests, and then store it or send it directly to the ethanol production process.

Ethanol production company Green Plains. Corn transported by truck is being moved to the storage warehouse.
[Photo by Korea Automobile Journalists Association]

The corn is ground into powder, fermented, then goes through drying and dehydration processes, gradually becoming high-purity ethanol. After several steps, 95% pure alcohol is produced, then moisture is removed again to make 99.9% ethanol. Before shipment, a small amount of denaturant is added to distinguish between ethanol for consumption and other uses.

In Nebraska, including this plant, there are 24 ethanol plants located mainly in plains adjacent to corn farms. The state uses 335,000 tons of corn annually to produce 2.3 billion gallons of bioethanol. The byproduct of ethanol production, distillers grains, is used to make animal feed. The economic effect of producing ethanol and distillers grains in this state reaches $4.5 billion (about 6 trillion KRW) annually.

Corn grits, the raw material for bioethanol. Ethanol is produced through fermentation and other processes.
[Photo by Korea Automobile Journalists Association]

They are also considering ways to reduce carbon emissions from the ethanol production process. While blending ethanol with gasoline itself reduces carbon emissions, capturing, utilizing, and storing carbon from the process has a significant reduction effect. Plans to expand the existing carbon pipeline connected to neighboring states are underway, aiming to operate in the second half of the year after next.

A plant official said, "Using carbon capture, utilization, and storage (CCUS) methods, we can reduce more than half of total carbon emissions. By building carbon pipelines with neighboring states like Iowa and Minnesota, we can contribute to carbon reduction in the Midwest region."

Raw materials, by-products, and additives in the bioethanol production process. Starting from corn on the left, after going through the process, ethanol with a purity of 99.9% (first on the right) is produced.
[Photo by Choi Dae-yeol]

Why Demand Increases with Higher Ethanol Blends

The ethanol produced this way is blended with gasoline and sent to distribution facilities at the final consumer contact points such as gas stations. Large gas station chains sometimes purchase pure ethanol and blend it themselves before selling. The Boselman Enterprise, which I visited, is a long-established gas station operator in Nebraska that receives ethanol supply and blends it directly for sale.

Gas stations have two types of storage tanks: one for 98% ethanol and another for gasoline blended with 10% ethanol (E10). The U.S. mandates a 10% ethanol blend, so E10 is the standard fuel. Consumers can also choose E15 with 15% ethanol, E30 with 30%, and E85 with 50-85%. Regular vehicles can use E10 and E15, while E30 and above require specially developed flex-fuel vehicles.

Fuel pumps at a gas station operated by Boselman Enterprises in Nebraska, USA. Consumers can choose to refuel with diesel (first from the left), E85, E15, E10, or gasoline without ethanol additives.
[Photo by U.S. Grains Council]

The higher the ethanol content, the cheaper the fuel. Pure gasoline without ethanol costs $3.649 per gallon, E10 costs $3.089, about an 18% difference. E15 is $3.039 per gallon, and E85 is $2.489. The price difference can be up to about 47% depending on ethanol content. The most sold fuel is E15, followed by E10. Even with ethanol blended, drivers do not feel a performance difference, and the higher octane rating helps efficiently control knocking. Usually, additives are used to increase octane rating, which makes regular gasoline more expensive, but ethanol-blended fuel is cheaper.

Charlie Boselman, chairman of Boselman Enterprise, said, "There are government incentives based on ethanol sales, and gas station operators receive certain benefits when installing blending pumps, enabling competitive pricing. We also operate charging stations, but since the spread of electric vehicles is uncertain, we have a strategy to meet customer demand with various options."