The growth of the ethanol industry was relentless. Between 2005 and 2010, over a
hundred ethanol operating plants were established to satisfy a demand that was peaking. Even
through the terrible financial crisis in 2008, the success of ethanol somehow prevailed. The high
demand for ethanol is correlated to its use as an oxygenate for gasoline and as a renewable motor
fuel (flex-fuel). Oxygenates are chemical compounds that contain oxygen as part of its chemical
structure. These chemical compounds would increase the octane rating for gasoline, which would
further benefit the car from fewer incidences of engine knock. In the 1970s, tetraethyl lead (TEL)
was the primary oxygenate; however, it was phased out in 1979 because it could not comply with
environment regulations. Fast forward to the 1990s when methyl tertiary butyl either (MTBE)
became the prominent oxygenate in the United States. As MTBE became more popular, studies
soon began to show that it was a very harmful substance for the environment; thus, states began
to completely or partially ban the use of MTBE. The banning of MTBE became the threshold for
ethanol to step in and make an impact in the energy industry. Additionally, the Energy Policy
Act of 2005 would further diminish the use of MTBE, giving ethanol full control of the
oxygenate market.
