ECMD Contact: Colin Messer
(505) 476-3314
ColinJ.Messer@state.nm.us

Overview
Alcohol can be blended with gasoline for use as transportation fuel. It may be produced from a wide variety of organic feedstock. The common alcohol fuels are methanol and ethanol. Methanol may be produced from coal, natural gas, wood and organic waste.

Ethanol is commonly made from agricultural plants containing sugar. Corn is used as feedstock in the Midwest, but grain milo from New Mexico, Texas, Colorado, Oklahoma and Kansas is used as feedstock at the Portales, New Mexico, plant.

Most unleaded gasoline in the U.S. contains ethanol, with blends typically ranging from 5 to 10%. E85 is a blend of 85% ethanol and 15% gasoline. Original equipment manufacturers produce "flexible fuel" vehicles that can run on E85 or gasoline.

Resources and Production
New Mexico currently has one ethanol production plant in Portales. The plant was designed with a capacity of 10 million gallons per year, but more efficient operation has enabled production of about 30 million gallons per year. The U.S. leads the world in ethanol production, with an increase from 6.5 billion gallons in 2007 to 13.2 billion gallons in 2010.

Markets
Twelve percent of the nation's motor fuel is blended with ethanol. Alcohol producers have introduced more sophisticated risk management techniques into marketing strategies. Producers can lock in prices on the futures market, using their known production cost figures, rather than relying on the volatile spot market.

Incentives
In the early 1980's both federal and state excise tax incentives were introduced to encourage the use of alcohol blended fuels. All of the ethanol production capacity in New Mexico was built during this period. The state tax incentives were phased out in the late 1980's.

In June 1998 the federal government extended federal ethanol fuel excise tax incentives through 2007. In simplified terms, the fuel blender may take either an income tax credit of 54 cents per gallon of ethanol used, or an exemption from the excise tax of 5.4 cents per gallon of 10% blended fuel.

Pic Quik #72
4675 Sonoma Ranch Blvd.
Las Cruces, NM 88012
575-382-4469

Pic Quik #5
2580 Don Roser Drive
Las Cruces, NM 88004
575-532-5844

Pic Quik
2240 E. Missouri Ave, Ste A
Las Cruces, NM 88001
575-523-5611

Additional information
Alternative Fuels Data Center - Ethanol
U.S. Department of Energy Fuel Economy Information