The use of ethanol for fuel was widespread in Europe and the United States
until the early 1900s (Illinois Corn Growers’ Association/Illinois Corn
Marketing Board). Because it became more expensive to produce than
petroleum-based fuel, especially after World War II, ethanol’s potential was
largely ignored until the Arab oil embargo of the 1970s. One response to the
embargo was increased use of the fuel extender “gasohol ” (or E-10), a
mixture of one part ethanol made from corn mixed with nine parts gasoline.
From the time of the first Organization of Arab Petroleum
Exporting Countries oil embargo nearly 30 years ago,
the United States has looked to new technology for solutions
to its energy problems. Indeed, the first government reports
to recommend an energy research and development (R&D)
agenda appeared within weeks of that 1973 event. In 1975,
President Ford created the Energy Research and Development
Administration (ERDA), consolidating under one umbrella
existing R&D energy programs from several agencies.
In late 1977, ERDA became part of the new Department
of Energy (DOE).
After the oil embargo ended, the use of ethanol increased, even though the
price of oil fell and for years stayed low. Ethanol became cheaper to make
as its production technology advanced. Agricultural technology also
improved, and the price of corn dropped. By 1992, over 1 billion gallons of
fuel ethanol were used annually in the United States, and by 2004 usage had
risen to over 3.4 billion gallons. Many farm groups began to see ethanol as a
way to maintain the price of corn and even to revitalize the rural economy.