The biofuels world is abuzz with talk of high octane fuel. Ethanol trade groups weighed in recently with regulators on the role of higher octane fuel in meeting fuel economy targets. Their interest in gasoline and fuel economy might seem odd, except that their plan is to deliver higher octane gasoline by increasing the amount of ethanol blended into it. Octane is a confusing, technical topic with complex implications for ethanol and vehicle efficiency. Depending upon whom you ask, high octane gasoline blends with more ethanol are either critical to enable cars to deliver much needed fuel economy improvements, or a dead-end strategy that Congress should block, by requiring ethanol blends never exceed 10 percent. As usual, the arguments of the most extreme partisans on either side lean towards hype, so here are the 9 things you need to know about high octane fuel, and my perspective on a path forward.
High octane fuel enables more powerful or more efficient engines
I am trained as a chemist, so when I hear octane I think of a saturated hydrocarbon molecule with 8 carbon atoms. But in the context of engines, octane is a standard measurement for fuels that describes their ability to burn without knocking in high compression engines. Higher octane fuels allow for engines to operate at higher compression ratios, which improves power and performance. When gasoline is first distilled from oil it has an octane number of about 70. But such a low octane fuel would severely limit the efficiency of engines, so refinery processes and additives are used to raise the octane number to about 87 for regular gasoline and 91 for premium.
Automakers would appreciate higher octane fuel
Higher octane fuel makes life easier for automakers. Automakers are increasingly adopting turbocharging and other engine technologies to improve power and fuel efficiency, and these technologies work better with higher octane fuel. However, the higher prices of high octane fuel available now discourages consumers from purchasing it, limiting its use primarily to luxury or high performance vehicles. If higher octane fuel was widely available at attractive prices, automakers could squeeze more performance and efficiency out of technologies they are already starting to use.
The ethanol industry is very excited about high octane fuel
There are a variety of possible additives to raise octane, but ethanol is at the head of the pack. A complex set of technical and regulatory constraints limits the combinations of additives that can be used in gasoline. Over the last decade, ethanol has become a major high octane fuel additive. Today most of the gasoline sold in the United States has 10% ethanol, but if the ethanol blending level was increased from 10% to 30% without making other changes in the fuel, the octane rating would increase by about 6 points (or from 87 to 93). Moreover, ethanol is generally less expensive than gasoline, so higher ethanol blends could be sold for less than conventional gasoline, offering the promise of higher octane fuel for lower prices.
Ethanol is more valuable as a source of octane than as a source of energy
One of the puzzles of ethanol’s recent history has been the simultaneous success of the 10% ethanol blend (called E10) and the almost total failure of a higher concentration blend called E85 (which is actually 51%-85% ethanol). One important reason has to do with market access. E10 is compatible with all cars and is sold in almost all gas stations, while E85 is compatible only with flex-fuel vehicles (FFVs) that make up 6% of the fleet, and is sold in only about 2% of gas stations, often at uncompetitive prices. The result is that E10 is used almost everywhere, and E85 is used almost nowhere. But while these logistical challenges are significant, there is a more fundamental reason for the competitive advantage of E10 over E85.
Ethanol plays two roles in gasoline blends, acting as an additive to increase octane, and also acting as source of energy. In E10, ethanol is a cost competitive source of octane, and without ethanol, refiners or blenders would need to increase the use of other high octane blending components that are more expensive than ethanol. But in E85 ethanol makes up the majority of the fuel, and in this case the lower energy density of ethanol compared to gasoline results in FFVs getting about 25% fewer miles per gallon on E85 than E10. To make up for this, E85 must be sold at a commensurate discount to be cost effective. The point is that when ethanol is used for octane it adds value, but when it is used as a fuel, like E85, the resulting fuel must be sold at a steep discount. So it makes sense to use ethanol as an octane booster, and high octane gasoline expands that opportunity.
High octane ethanol blends used by optimized vehicles balance higher octane against lower energy
One reason high octane ethanol blends are attractive is that they balance the interests of drivers and automakers. According to recent studies, an optimized high compression engine using a high octane ethanol blend of between 20-40% ethanol would have an efficiency gain that approximately offsets the lower energy content of the blended fuel. This gets a little confusing because there are several related measures of efficiency in play: volumetric efficiency (or miles per gallon), cost effectiveness (or miles per dollar), energy efficiency (or miles per unit energy), and carbon intensity (global warming pollution emissions per mile). An optimized high compression engine running on high octane mid-level ethanol blend would improve energy efficiency and reduce carbon intensity, but because of the lower energy density of ethanol the volumetric efficiency would be a wash. Prices of ethanol and gasoline change over time, but generally ethanol is cheaper than gasoline so cost effectiveness would also likely improve.
If everything works as planned, drivers could buy cheaper fuel without a mileage penalty, automakers would see a greater benefit from emissions reducing technologies like turbocharging that they are already introducing, the efficiency of the combined vehicle fuel system would improve and emissions would fall. The overall impact of the improvements is subtle. Recent studies suggest that the cars optimized for E25 would reduce carbon intensity by about 5% compared to E10. This may seem like a fairly modest improvement, but every little bit helps. And together with other improvements in conventional vehicles, more electric vehicles, and cleaning up all of our fuels, high octane fuels can help cut oil use and reduce global warming pollution from transportation.
But while the impact of high octane fuels on overall vehicle efficiency is subtle, these fuels have a dramatic impact on the value of added ethanol. Going from E10 to E25 without optimization would maintain the same energy efficiency, but volumetric efficiency would be expected to fall by roughly 5% because of ethanol’s lower energy density. That means a car that goes 300 miles on 10 gallons of E10 would go about 285 miles on 10 gallons of E25. But optimizing the engine (especially the compression) to take advantage of the higher octane of E25 can improve energy efficiency about 5%, enough to offset the lower energy density, so the car can go 300 miles on 10 gallons of E25. This means the additional 1.5 gallons of ethanol in E25 versus E10 takes you 45 miles in an optimized car instead of 30 miles in an un-optimized car, 50% farther! Ethanol is a much more competitive fuel in vehicles optimized for octane, which is why the ethanol world is so excited about it.
To make high octane fuels a success, we need to optimize the whole system
The transportation fuel system is complex and large, and a lot of things need to change in a coordinated fashion to make a transition to high octane fuels work. Automakers have to start selling optimized vehicles, gas stations have to make the high octane fuel available for these optimized vehicles while continuing to provide appropriate fuel for the existing fleet, and fuel producers and distributors have to adjust their operations to match the evolving demand. This kind of transition may seem challenging, but we have changed our fuel blends several times in the past, including dramatic changes like replacing leaded gas with unleaded and changes that happened behind the scenes such as reducing sulfur. With coordination, advanced planning, and appropriate consumer education, this can be a manageable process, but it cannot happen overnight.
Today we don’t yet have an agreed upon target for the optimal properties of high octane fuel, to say nothing of an agreement on how best to manage a transition. The Department of Energy has been leading a project on the co-optimization of fuels and engines, and technical discussions are underway in places like the Society for Automotive Engineers, the Coordinating Research Council, and ASTM International to understand the pros and cons of different approaches and to develop technical specifications. Fuel regulations and policies at state and federal level will also need to be adjusted. Only once these processes are well underway can automakers and fuel retailers start to adjust their operations, leading eventually to more visible changes, as the high octane fuel and optimized vehicles enter the market. Even with concerted action starting now, this process will take about a decade, so realistically we can look for high octane fuels to have a significant impact until 2026 or so.
Changing from E10 to E25 does not mean 150% more ethanol
So far I have just been discussing how we use ethanol as part of our fuel mix, but many of the most challenging and controversial questions about ethanol pertain to how it is made and what it is made from, rather than how it is used. The transition to E10 happened mostly between 2005 and 2010, and while it was not very visible to drivers, the increased consumption of corn to produce ethanol profoundly reshaped U.S. agricultural markets and land use and caused an anti-ethanol backlash that continues to reverberate. So it is understandable that blending more ethanol into gasoline raises concerns about where all the ethanol will come from and associated impacts on grain prices, water pollution and wildlife habitat.
Of course if all the gasoline changed from E10 to E25 overnight, it would require two and a half times as much ethanol, which would be a big problem. Most ethanol used in the U.S. today is made from corn, and since E10 already accounts for nearly 40 percent of the corn crop, a rapid transition to E25 would put intense pressure on corn markets with global ramifications and would cause a great many problems. But for the logistical reasons I explained above, changes in the fuel supply will not happen overnight. Realistically it will take a decade before vehicles optimized for high octane fuel and the fueling infrastructure to deliver these fuels are widespread, and it will be several more years after that before these new vehicles account for the majority of the fuel consumption. Because of the ongoing progress on fuel efficiency, the cars being sold between 2026 and 2036 will be much more efficient than the cars they are replacing, and this means total fuel use will be falling. For example, if a car sold in 2016 that gets 25 miles per gallon of E10 is replaced in 2026 with one getting 50 miles per gallon of E25 it will use just 25% more ethanol, and almost 60% less petroleum, to drive the same distance as the car it replaces.
Accurate projections of how demand for different fuels will evolve over time are much more complicated since they must consider not just fuel efficiency and ethanol blending, but also increasing use of electric vehicles and many other factors. A recent study from the National Renewable Energy Laboratory explored these questions in detail.
Getting the maximum climate benefit from each gallon of ethanol means moving beyond corn
Today most ethanol is made from corn and sugar, but as we look towards a clean transportation future, it’s clear we can and must do better. The U.S. has plenty of biomass resources to produce enough cellulosic ethanol for mid-level blends without using any more corn, but commercial production of cellulosic ethanol just started recently. It will take several more years until billions of gallons of cellulosic ethanol are available for blending into high octane fuels. Precisely how quickly cellulosic ethanol scales up depends a lot on investors’ perception of the future demand for ethanol, which has been quite confusing lately. A roadmap for high octane fuel will clarify ethanol market expectations and facilitate investment in cellulosic ethanol production.
Fool me twice? Snatching defeat from the jaws of victory with fuel economy loopholes
A lot of vehicle efficiency experts are deeply skeptical about high octane ethanol blends because of a bad experience with flex fuel vehicle (FFV) policy. Their skepticism is well founded, since we are still recovering from the disastrous FFV loophole that was introduced back in the late 1980s. In a shortsighted effort to promote alternative fuels like E85, Congress created a loophole that gave automakers credit under (CAFE) fuel economy regulations for selling the flex fuel vehicles that could run on E85, but could also run on regular gasoline. Automakers did indeed sell quite a few FFVs (more than 16 million FFVs between 2004 and 2014), but FFV drivers almost never fueled up on E85, so as far as reducing petroleum use is concerned, the strategy was a disaster. The main impact of the FFV loophole was that auto makers sold less efficient vehicles, thus increasing overall oil use in the fleet.
The road to high octane fuel
The ethanol and auto industry are already starting to argue that high octane fuels should be somehow supported in the mid-term review of the fuel economy and GHG standards for 2022-2025. I agree that optimizing vehicles and fuels as a system makes a lot of sense. But since we are at least a decade away from getting a new high octane fuel into the marketplace, it would be seriously premature to credit any efficiency improvements associated with higher octane fuel now. Providing credits up front would likely backfire, just as the FFV loophole did. Crediting emissions reductions before they actually appear is also a bad bet for the climate, since increased emissions from weaker standards are guaranteed, but the potential benefits of a transition to high octane fuel may never materialize.
We are encouraging regulators to base the mid-term review on the fuels currently in the market. As my colleague David Cooke explained, automakers have the technology to meet and exceed the current standards with the fuel we have today. Looking forward, it makes sense to see what opportunities high octane fuels present to make cars even more efficient, which should be considered in the next round of vehicle standards (2026 and beyond). A well implemented deployment of high octane fuel can accelerate efficiency improvements in conventional vehicles, but changes in the standards must be based on the fuel drivers actually use, not wishful thinking.
 Actually there are a pair of tests run under different conditions that produce the Research Octane Number (or RON) and Motor Octane Number (MON). The Anti-Knock Index (AKI), which is the primary octane index used for gasoline in the United States, is the average of the two. The octane number compares the complex mix of hydrocarbons and other components in gasoline to a fuel composed of just iso-octane and heptane, with pure octane assigned a rating of 100.
 See the FAQ on Automotive Gasoline by Bruce Hamilton for lots more useful information at http://www.faqs.org/faqs/autos/gasoline-faq/.
 According to the Energy Information Administration (EIA), sales of turbocharged engines have increased from 3% in model year (MY) 2010 to 17% in MY 2014, and they project that by MY 2025 more than 80% of engines will be turbocharged, EIA. Today in Energy for April 6, 2016. “Engine design trends lead to increased demand for higher-octane gasoline” Online at http://www.eia.gov/todayinenergy/detail.cfm?id=25692 .
 J.F. Thomas, B.H. West S.P. Huff. 2015. Effects of High-Octane Ethanol Blends on Four Legacy Flex-Fuel Vehicles, and a Turbocharged GDI Vehicle. Available online at: https://www.fueleconomy.gov/feg/pdfs/ORNL_High_Octane_Legacy_Vehicles_Report(final).pdf
 In fact, the ASTM specification for gasoline allows up to 10% ethanol, so E10 compatibility is essentially the same thing as gasoline compatibility.
 Irwin, S. and D. Good. “The Competitive Position of Ethanol as an Octane Enhancer.” farmdoc daily (6):22, Department of Agricultural and Consumer Economics, University of Illinois at Urbana-Champaign, February 3, 2016.
 T.G. Leone, J.E. Anderson, R.S. Davis, A. Iqbal, R.A. ReeseII, M.H. Shelby, and W.M. Studzinski. “The Effect of Compression Ratio, Fuel Octane Rating, and Ethanol Content on Spark-Ignition Engine Efficiency. Environ. Sci. Technol. 2015, 49, 10778−10789
 For details, see my recent report, Fueling a Clean Transportation Future.
 25 MPG car driving 12K miles will use 480 gallons of E10, or 432 gallons of petroleum and 48 gallons of ethanol. Replacing that car with one that gets 50 miles per gallon on E25 will cut fuel use to 240 gallons, 180 gallons of petroleum and 60 gallons of ethanol. Thus while ethanol blending increased by 150%, ethanol use increased only 25% while petroleum use falls by almost 58%.
 C. Johnson, E. Newes, A. Brooker, R. McCormick. S. Peterson, Paul Leiby, Rocio Uria Martinez, G Oladosu ML. Brown. 2015. High-Octane Mid-Level Ethanol Blend Market Assessment National Renewable Energy Laboratory. Available online at http://www.afdc.energy.gov/uploads/publication/high-octane_mid-level_ethanol_mkt_assessment.pdf
 U.S. Information Administration. Alternative Fuel Vehicle Data. Available online at: http://www.eia.gov/renewable/afv/supply.cfm?fs=a&sfueltype=e85