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A timeline of the ethanol industry
by Betsy Cole
September, 2006

Ethanol has become very popular in recent years as an alternative fuel supply. But it's actually been used to produce energy for several decades.

1826	American Samuel Morey develops a prototype internal combustion engine that runs on ethanol and turpentine.
1850	"Burning fluid," or camphene, a combination of turpentine, alcohol, and camphor, sold for 50 cents a gallon and was the lamp fuel of choice for most Americans.
1862	U.S. Congress imposes a $2 per gallon tax on ethanol to fund the Civil War, making it too expensive for everyday use.
1906	Under President Theodore Roosevelt, Congress passes the Free Alcohol bill, repealing the alcohol tax. Corn alcohol is now cheaper than gasoline.
1908	Henry Ford manufactures the world first mass-produced flex-fuel vehicle, the Model T, designed to run on ethanol, gasoline, or a combination of both.
1917-1918	Fuel demand during World War I increases ethanol use to 60 million gallons a year.
1918	Prohibition begins when the 18th Amendment is ratified. Ethanol can only be sold when rendered with 5 percent petroleum.
1920s	Gasoline becomes the most widely used motor fuel.
1933	The "farm chemurgy" movement encourages Congress to pass tax incentives to promote ethanol production and reduce unemployment among farmers. Prohibition is repealed.
1934-1939	Under pressure from the petroleum industry, the government fails to enact alcohol fuel incentives.
1942	World War II pumps up demand for ethanol, mostly for synthetic rubber and aviation fuel.
1947	Charles E. "Chuck" Yeager becomes the first pilot to fly to Mach 1, the speed of sound. At 43,000 feet, Yeager's Bell X-1-1 aircraft broke the so-called "sound barrier" burning a combination of ethanol, liquid oxygen, and nitrogen.
1950s-1960s	Commercial ethanol falls out of favor as cheap foreign oil fuels America's growing dependence on the automobile.
1973	The Arab countries of OPEC, plus Egypt and Syria announce an oil embargo against nations that support Israel in the ongoing Yom Kippur War, while at the same time entering into a price-control agreement that sends world oil prices sky-high. The embargo triggers a series of recessions and high inflation that last for over a decade.
1974	The Nixon administration initiates "Project Independence," with the goal of reaching total independence from foreign energy sources by 1980.
1978	Congress passes the National Energy Act. Included are statutes encouraging the use of renewable resources, and regulations on Gasohol, which is defined as a blend of gasoline with at least 10 percent alcohol produced from renewable biomass. This effectively results in a 40 cent per gallon subsidy for every gallon of ethanol blended into gasoline.
1980	The Energy Security Act offers insured loans for small ethanol producers and loan guarantees to cover the costs of building new ethanol plants. The first U.S. survey of ethanol production finds that fewer than 10 facilities exist, producing approximately 50 million gallons of ethanol per year.
1983	The number of ethanol plants reaches the highest point at 163, producing almost 600 million gallons of ethanol in one year.
1984	The Tax Reform Act increases the ethanol subsidy to 60 cents a gallon.
1985	Only 74 of 163 commercial ethanol plants remain in operation.
1988	Ethanol first used as an oxygenate additive to lower pollution caused by burning gasoline. However, Methyl Tertiary Butyl Ether, or MTBE, dominates the additive market.
1990	Ethanol plants, looking for ways to reduce costs, switch from coal to natural gas for power generation.
1992	U.S. ethanol production passes one billion gallons per year.
1994	The first commercial production of ethanol from cellulose (corn fiber) is achieved.
1997	U.S. increases production of cars and light trucks which can run on E85, a blend of 85 percent ethanol and 15 percent gasoline, though little E85 is available at the pump.
2001	The ethanol subsidy is reduced to 53 cents a gallon.
2002	U.S. ethanol production passes two billion gallons per year.
2003	California becomes the first of several states to switch from the additive MTBE to ethanol.
2004	U.S. ethanol production passes three billion gallons per year.
2005	E85 sells for an average of 45 cents a gallon less than gasoline in the U.S. Minnesota Gov. Tim Pawlenty signs a bill mandating that all gasoline sold in the state contain 20 percent ethanol by 2013. Minnesota is the first state in the country to have the 20 percent requirement.
2006	Bill Gates buys 25 percent interest in Pacific Ethanol, Inc. U.S. ethanol production passes four billion gallons per year.

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