You know about the U.S. federal government’s “all of the above” energy policy to bring new fuel sources to the U.S. marketplace but that doesn’t include fossil fuels because they compete with wind, algae, corn and other favored industries. So, you won’t be surprised to learn that a Dallas-based chemicals company is ready to produce ethanol for fuel from abundantly available natural gas – at lower costs than the corn-ethanol industry is able to produce its fuel – but is blocked by existing law from doing so.

Advanced Fuel Technologies, a division of Celanese Corporation, has developed a process to produce ethanol from hydrocarbon feedstocks at very competitive costs. The process is projected to have a significant cost advantage when compared to fermentation processes, like those used in the corn-ethanol industry. The company estimates it can make ethanol for a cash cost of only $1.50 a gallon. Diluted ethanol that’s blended into gasoline sells for $2.30 a gallon today.

That’s right. The U.S. could use natural gas or coal to produce fuel ethanol to be blended with gasoline and thereby reduce dependence on foreign oil – and without the need for government subsidization.

Renewable Fuel Standard stands in the way 

Most poultry producers know by heart why this isn’t happening. The 2007 Renewable Fuel Standard law mandates that escalating volumes of ethanol be blended into gasoline, with the top volume at 15 billion gallons in 2015. And this is why fossil-fuel-based ethanols are effectively blocked from even competing for the market.

Poultry producers certainly know the costs of this government control. Since the U.S. Congress required that corn-based ethanol be added to gas tanks, corn prices have about tripled. Importantly, the Celanese process, called TCX, would not impact food and feed supply or prices.

Furthermore, the technology is very energy efficient, produces limited amounts of waste and uses virtually no water.

Cellulosic vs. natural gas 

Celanese is asking Congress to change the law to allow oil refiners to use natural gas-based ethanol as well as corn-based ethanol in the country’s fuel supply. This would help to reduce the costs of producing gasoline and redirect the use of arable land to produce food rather than fuel, the company argues.

But maybe that makes too much sense for the central planners in Washington. They are busy subsidizing projects like solar, wind or cellulosic, which are more expensive and may never prove as economically viable as the conversion of natural gas to fuel. 

The Chinese, however, aren’t standing in the way of the conversion of hydrocarbons to fuel. Celanese initially planned to build a 60-million-gallon-per-year ethanol facility in Nanjing, but Beijing issued permits for an 80-million-gallon facility. The plant there will convert coal to ethanol.

So, here are the questions to be answered in Washington: Do we want to reduce dependence on foreign oil? Do we want greater choice in non-subsidized fuel options?

America has abundant natural gas. Why aren’t we using it?