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Homegrown Energy

The gasohol debate with an Illinois accent


May 4, 1984

I haven’t checked, but this must have been my fiftieth or sixtieth piece about gasohol. This explainer appeared the Reader’s Downstate section. Gasohol, of course, turned out to be a[nother] massive fraud perpetrated on the taxpayers by Congress on behalf of farmers.


Jerry Miller, a youngish man who works for the Department of Energy and Natural Resources in Springfield, is the Biomass Program Manager for the State of Illinois, which must make party introductions very interesting for him. Miller's forte is alternative fuels made from renewable sources, including ethanol.


Ethanol is another name for ethyl alcohol. Readers may remember it as the more controversial component of gasohol, the ballyhooed blend of 90 percent unleaded gasoline and ten percent pure, 200-proof ethanol whose marketing so littered the bumpers of pickup trucks after the 1979 Iranian oil cutoff.


More of the ethanol used to make that gasohol was made in Illinois than in any other state. But however much ethanol got made in Illinois in the late 1970s, a lot more was promised. "The biggest part of the industry in Illinois was fledgling when I came on board a couple of years ago," Miller recalls. "People would jump in with both feet without doing any market research. They produced first and looked for a market later. In the last three and a half years, we've gone from 26 ethanol plants operating or being planned in Illinois down to 12."


* * *


Ambition, thy name is Ethanol. It is widely assumed that the boom in gasohol evaporated with the collapse of world oil prices that began in 1980. Even with federal and state subsidies in the form of exemptions from sales and motor fuel taxes, gasohol had always cost more at the pump than plain unleaded. With gasoline cheap again, gasohol bowed to the majesty of the marketplace and rejoined in oblivion the ranks of rural curiosities like the beefalo.


Didn't it? Not exactly. "Gasohol" has largely disappeared from the advertising signs of Illinois gas stations, victim of its price and skepticism about its effects on engines, like "liberal" a discredited marketing term. But gasoline-ethanol blends not only survived but thrive—mostly under assumed names like "super unleaded with ethanol." Thus disguised, such blends have sold well nationwide: 358 million gallons per month on average in 1983, up more than 70 percent over 1982, which in turn had sales more than double those of 1981.


Nor do sales of ethanol blends show signs of faltering. David Halberg of the U.S. Renewable Fuels Association in Washington reports that U.S. plants are keeping pace with this burgeoning demand, with 80 million gallons of new production capacity scheduled to go on-line in 1984 alone. National capacity is still well short of meeting the two-billion-gallon-a-year goal for gasohol set by President Carter for the mid-'80s. But it is still more than six times the nation's 1981 capacity. And all done with a single oil embargo, and in the face of declines in the real price of gasoline.


How? At first gasohol was marketed rather like oleo or war bonds 40 years ago. It was a useful substitute for a commodity temporarily in short supply because of foreign misunderstandings; buying it was a patriotic gesture to keep our boys—in this case the boys on the farms—fighting. But ethanol is more than just a gasoline extender. It also is an ace octane booster.


So are compounds of lead. But the U.S. Environmental Protection Agency continues to limit the amount of lead that may be added to gasoline for this purpose, mainly because lead pollution is having much the same kinds of effects on inner city children that road salt has on street trees. Oil companies can boost the octane level of gasoline in the refining stage (which takes a lot of energy) or use a non-lead additive. MTBE—methyl tertiary butyl ether, synthesized from oil—is one such additive. Clean-burning ethanol is another. Thus "super unleaded with ethanol."


* * *


Current EPA plans call for a phasing out of lead additives by 1992. But EPA director William Ruckelshaus has argued in favor of speeding up that timetable. An accelerated phaseout would create what Halberg calls an "octane gap" in the motor fuels industry that farmers would be only too delighted to fill. A mere ten percent of the annual U.S. corn crop could narrow that octane gap by 20 percent—a market equivalent to 70 billion gallons of ethanol a year.


Oil companies such as Texaco and Ashland that market ethanol blends are aware that most motorists don't know exactly what ethanol is. Relying on the ignorance of U.S. consumers about chemical matters is cunning merchandising but hardly new. Such ignorance has made it possible for certain medicine makers to advertise "the pain reliever doctors prescribe most" without fear that more than a few consumers will recognize the ingredient being described as common aspirin. "Alcohol" conjures up visions of moonshine stills. "Gasohol" struck people as a gimmick, and while Americans are willing to buy gimmicks from politicians promising to make the economy run faster, they won't trust anything as valuable as their car to them. "Ethanol," by all accounts, sounds like a jet fuel to most motorists. As Jackson Browne likes to sing, it's who you look like, not who you are.


The success of the ethanol-gasoline blends is of particular importance to Illinois. "The industry has matured in Illinois," asserts Miller. And how. Archer Daniels Midland's pioneer alcohol fermentation and distilling facility (added to its existing corn processing plant in Decatur in 1978) was both an experiment and an example to the industry. Since then other firms (including Corn Products Corporation, in partnership with Texaco and Midwest Solvents) have joined ADM in the production of ethanol for the fuel blending market. Like ADM, these firms specialize in corn processing, and their four Illinois plants produce an estimated 220 million gallons of ethanol a year.


Now, 220 million is a biggish number. But it is still peanuts—or rather corncobs—compared to the potential. Making those 220 million gallons consumes roughly 85 million bushels of corn—which is all of seven percent of Illinois's recent yearly corn crops. Further, the fuel additive market alone could absorb vastly greater quantities of ethanol. Sales of ethanol-gasoline blends presently account only for about four percent of all gasoline sales nationwide. (The figure is higher in Illinois, although it is unclear exactly how much.)


* * *


Not all of that output goes into gasoline tanks. Ethanol is a useful substance that constitutes the better part of products from whiskey to mouth washes, industrial solvents to plastics. Big as the market for octane boosters is, these other markets beckon. Roughly ten percent of all the oil used in this country, for example, is used by the chemicals industry. Among other things, ethanol is useful because it can so easily be made into other chemicals. Converting corn into chemicals may be a spur to the export trade too. Just as 19th-century Illinois farmers found it cheaper to ship their corn in the form of whiskey or bacon than as raw grain, so their descendants would find it easier to export corn in some other form.


The widespread skepticism of a few years ago about the commercial viability of fuel ethanol has been largely dispelled. The E. F. Hutton company showed up in Taylorville in 1982 at a seminar on ethanol and fuel additives offering eager local capitalists "a tax advantaged investment in what we think is a major growth area of our economy."

Somebody seems to be listening to E. F. Hutton. The RFA's Halberg notes as evidence of the industry's maturation the fact that nearly all the first-generation ethanol plants were attached to existing food-processing plants. Furthermore, he says, some of the newer ones are what he calls "grass-roots" plants designed and built specifically to produce fuel ethanol.


The economic attractions of the ethanol business would seem to be assured, at least in the short term. The industry is a-building even without the massive federal subsidies for new plants promised as part of President Carter's short-lived $3 billion gasohol program—more slowly to be sure, but a-building nonetheless. (Farmers, of course, continue to subsidize the ethanol industry through low corn prices.) That profitability is not without condition, however. Ron Swager, assistant manager of DENR's Alternative Energy Section, notes, "In the plants now operating in Illinois, they've found that alcohol can't be the only product." The biggest of Illinois's plants dry the protein-rich stillage left over from the fermentation stage and sell it as livestock feed. The smaller ones have access to local feedlots where wet stillage can be fed directly to animals.


In the words of one DENR report, "The addition of a side-crop of commercial value makes . . . energy from biomass more feasible for both large- and small-scale operations." At an experimental facility at the Vienna Correctional Center, distiller's solubles (that part of stillage too dilute to be worth drying) can be pumped into tanks to feed microcrustaceans which in turn feed fish in a balanced aquaculture system. Illinois ethanolics never lacked for ingenuity. One planned smaller commercial plant hoped to export dried stillage to the Far East as a human food supplement, while another would have made dog food from it.


There is a more critical problem. Fuel blending demands waterless, 200-proof ethanol. Distilling ethanol to that purity is expensive, and only larger plants can afford to do it. Terry Miller points out that most of the surviving Illinois plants are large, ranging from a quarter-million gallons a year up to 70 million. (The smallest makes just 4,000 gallons a year of 190-proof ethanol, which it must job out to other plants to be "dried.") "When people call me," Miller adds, "I tell them that anything smaller than about 500,000 gallons a year is just not practical commercially. Smaller commercial plants built at Kankakee, Indianola, and Springfield have closed or curtailed operations because of the lack of a market for their lower-proof ethanol.


Several methods exist to dry alcohol, but none of them is cheap for small systems, even if they had the cash to build them, which often they do not. An analysis done for DENR in 1982 by two University of Illinois economists concluded, "The economic attractiveness of a grain-based ethanol plant" roughly in the half-million to one-and-a-half-million-gallon range "appears limited." (But not hopeless. Two of the state's smaller plants —in Ottawa and Metropolis—have opted for the promising molecular sieve technique for drying ethanol and are upgrading their plants to produce 200-proof.)


Even on a larger production scale, the economics of ethanol from corn are still problematical. Illinois makes ethanol from corn because it has corn-processing technology in place and ready access to raw material. But corn remains in many ways a poor choice as a feedstock. Corn prices may be low enough to push a farmer into the real estate business, but corn is still expensive compared to other crops. Like sugarcane. U.S. producers pressured Congress to slap an import duty on ethanol imported from sugarcane-rich Brazil, the world's biggest manufacturer. The move led the president of Brazil's giant oil company, Petrobras, to complain. "The very existence of the tariff will lead many people in the U.S. to think that fuel alcohol produced in their country is not economical and thus misleading American consumers."


Costs have been offset somewhat by state and federal exemptions from sales and motor fuel excise taxes. (It was Illinois's own Charles Percy who sponsored the legislation which, by exempting gasohol from the federal four-cents-a-gallon excise tax, made ADM's early gasohol efforts possible.) There have been complaints that ethanol no longer needs or deserves such tax breaks. But subsidies are judged in Washington not according to whether they are useful but whether they are popular, and the gasohol subsidy was very popular with key farm-state congressmen. When Congress passed its nickel-a-gallon gas tax increase late last year, gasohol was exempted. Indications are that the industry could survive the gradual elimination of such subsidies, but there is no way to tell, and the industry is hardly likely to volunteer to try.


* * *


Depending on how one defines one's terms, of course, it is possible for fuel ethanol from corn to be profitable and still not be economical. In a sense, ethanol's new career as an octane booster isn't much different from its beginnings as a gasoline extender. In each case it is possible to replace a petroleum product from a renewable source. But what happens if oil prices continue their slide, while corn prices eventually climb? Manufacturers get squeezed, that's what. Drought and the USDA's Payment in Kind program have reduced corn crops and swelled prices; as a result, says Halberg, "Nobody's making any money right now."


It is for that reason that Amory Lovins, the "soft energy" economist, lumps the conversion of corn into ethanol with dubious prospective technologies such as ocean thermoelectric power, wave energy, and solar power satellites. Speaking to a DENR annual conference in Chicago in 1981, Lovins instead endorsed an ethanol industry using farm and forest waste as raw materials—wastes that DENR officially agrees are "the most cost-effective feedstock" for an Illinois ethanol industry—as one of the eventual replacements for oil.


It is always risky to try to anticipate technological breakthroughs. But a plausible hint of Illinois's ethanol future is contained in a research report released by the USDA's research lab in Peoria. Scientists there have discovered the only yeast that digests xylose, a sugar found in hemicellulose. (It is Pachysolen taniwphilus, described by French scientists who discovered it in the 1950s in tannery wastes as possessing particularites tout a fait remarquables.)


Hemicellulose, with cellulose, makes up the woody parts of plants; xylose thus constitutes an estimated ten to 25 percent of crop and processing wastes such as straw, corn husks, and paper pulp—yes, even the Sun-Times. The yeast converts xylose directly into alcohol, which holds the promise of adding more than four billion gallons a year to the potential yield from cellulosic wastes. Researchers have been studying how to make Pachysolen grow in a sustained way. If perfected, it would mean being able to continuously convert the waste stream of, say, paper mills into ethanol.


In sum, while it appears that ethanol has a happy future in Illinois, ethanol from corn may not. At the moment there are at least 20 major alcohol-related research projects under way under various aegises. Some focus on farm-size stills, some on commercial-scale processes, some on techniques with possibilities for both—new crops, new "bugs," new applications. Alcohol from renewable sources is the first indigenous energy source developed in Illinois in a long time. Its significance may not be in jobs created or imported petroleum replaced, however, but in the acceptance of the novel notion that energy can be something you make and not something you buy. ●




John Hallwas

Essential for anyone interested in Illinois history and literature. Hallwas deservedly won the 2018 Lifetime Achievement Award from the Illinois State Historical Society.

Lee Sandlin Author

One of Illinois’s best, and least-known, writers of his generation. Take note in particular of The Distancers and Road to Nowhere.

Chicago Architecture Center

See Home Page/Learn/

Resources for a marvelous building database, architecture dictionary, even a city planning graphic novel. Handsome, useful—every Illinois culture website should be so good.

The Encyclopedia of Chicago


The online version of The Encyclopedia of Chicago. Crammed with thousands of topic entries, biographical sketches, maps and images, it is a reference work unmatched in Illinois.

Illinois Great Places

The Illinois chapter of the American Institute of Architects in 2018 selected 200 Great Places in Illinois that illustrate our  shared architectural culture across the entire period of human settlement in Illinois.

McLean County Museum

of History

A nationally accredited, award-winning project of the McLean County Historical Society whose holdings include more than 20,000 objects, more than 15,000 books on local history and genealogy, and boxes and boxes of historical papers and images.

Mr. Lincoln, Route 66, and Other Highlights of Lincoln, Illinois


Every Illinois town ought to have a chronicler like D. Leigh Henson, Ph.D. Not only Lincoln and the Mother road—the author’s curiosity ranges from cattle baron John Dean Gillett to novelist William Maxwell. An Illinois State Historical Society "Best Web Site of the Year."

Illinois Digital Archives


Created in 2000, the IDA is a repository for the digital collections of the Illinois State Library and other Illinois libraries and cultural institutions. The holdings include photographs, slides, and glass negatives, oral histories, newspapers, maps, and documents from manuscripts and letters to postcards,  posters, and videos.

The Illinois State Museum


The people's museum is a treasure house of science and the arts. A research institution of national reputation, the museum maintains four facilities across the state. Their collections in anthropology, fine and decorative arts, botany, zoology, geology, and  history are described here. A few museum publications can be obtained here.

Chronicling Illinois

“Chronicling Illinois” showcases some of the collections—mostly some 6,000 photographs—from the Illinois history holdings of the Abraham Lincoln Presidential Library.


I will leave it to the authors of this interesting site to describe it. "Chicagology is a study of Chicago history with a focus on the period prior to the Second World War. The purpose of the site is to document common and not so common stories about the City of Chicago as they are discovered." 

Illinois Labor History Society

The Illinois Labor History Society seeks to encourage the preservation and study of labor history materials of the Illinois region, and to arouse public interest in the profound significance of the past to the present. Offers books reviews, podcasts, research guides, and the like. 

Illinois Migration History 1850-2017

The University of Washington’s America’s Great Migrations Project has compiled migration histories  (mostly from the published and unpublished work by UW Professor of History James Gregory) for several states, including Illinois. The site also includes maps and charts and essays about the Great Migration of African Americans to the north, in which Illinois figured importantly. 

History on the Fox

An interesting resource about the history of one of Illinois’s more interesting places, the Fox Valley of Kendall County. History on the Fox is the work of Roger Matile, an amateur historian of the best sort. Matile’s site is a couple of cuts above the typical buff’s blog. (An entry on the French attempt to cash in on the trade in bison pelts runs more than

2,000 words.)




Southern Illinois University Press 2017

A work of solid history, entertainingly told.

Michael Burlingame,

author of Abraham 

Lincoln: A Life 

One of the ten best books on Illinois history I have read in a decade.

Superior Achievement Award citation, ISHS Awards, 2018

A lively and engaging study . . .  an enthralling narrative.

James Edstrom

The Annals of Iowa

A book that merits the attention of all Illinois historians

as well as local historians generally.

John Hoffman

Journal of Illinois HIstory

A model for the kind of detailed and honest history other states and regions could use.

Harold Henderson 

Midwestern Microhistory

A fine example of a resurgence of Midwest historical scholarship.

Greg Hall

Journal of the Illinois

State Historical Society

Click  here 

to read about

the book 

Click  here 

to buy the book 


Southern Illinois University Press

SIU Press is one of the four major university publishing houses in Illinois. Its catalog offers much of local interest, including biographies of Illinois political figures, the history (human and natural) and folklore of southern Illinois, the Civil War and Lincoln, and quality reprints in the Shawnee Classics series.

University of

Illinois Press

The U of I Press was founded in 1918. A search of the online catalog  (Books/Browse by subject/Illinois) will reveal more than 150 Illinois titles, books on history mostly but also butteflies, nature , painting, poetry and fiction, and more.  Of particular note are its Prairie State Books,  quality new paperback editions of worthy titles about all parts of Illinois, augmented with scholarly introductions.

University of

Chicago Press

The U of C publishing operation is the oldest (1891) and largest university press in Illinois. Its reach is international, but it has not neglected its own neighborhood. Any good Illinois library will include dozens of titles about Chicago and Illinois from Fort Dearborn to

Vivian Maier.

Northern Illinois University Press

The newest (1965) and the smallest of the university presses with an interest in Illinois, Northern Illinois University Press gave us important titles such as the standard one-volume history of the state (Biles' Illinois:
A History of the Land and Its People) and contributions to the history of Chicago, Illinois transportation, and the Civil War. Now an imprint of Cornell University Press.


Reviews and significant mentions by James Krohe Jr. of more than 50 Illinois books, arranged in alphabetical order

by book title. 


Illinois Center for the Book

Run by the Illinois State Library, The Center promotes reading, writing and author programs meant to honor the state's rich literary heritage. An affiliate of the Library of Congress’s Center for the Book, the site offers award competitions, a directory of Illinois authors, literary landmarks, and reading programs.

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