Ethanol fuel, also known as ethyl alcohol, has an interesting history and an intriguing future. At one point, proponents believed ethanol would provide the path to energy independence from Middle Eastern oil. Fast forward many years and this once promising idea has yet to pan out in the way that its early supporters envisioned. New technologies, however, have arisen since then so investors should not give up on this potentially high-growth area.
Although ethanol has not replaced petroleum as the primary fuel source in the world, it has a widespread reach nonetheless. Here in the United States., most gasoline blends contain 10% ethanol. This E10 fuel came into popularity thanks to The Clean Air Act Amendments of 1990. Due to its low amounts of ethanol, E10 is not considered an alternative fuel. Even so, the sheer volume of domestic gasoline consumption has easily made the U.S. the top producer of ethanol. Companies such as Archer Daniels Midland (ADM), Valero (VLO), and Green Plains (GPRE) account for a substantial portion of this production. Continue Reading »