Over at Brothers Judd we have an article about home distilleries for producing fuel ethanol. I touched on this before and it’s heart warming to see that others are discovering the points I made about decentralization and taxes.
The problem with home distallation is not technical but financial, in particular government financial. Ethanol taxes are a big revenue stream which local, state and federal governments are not going to give up easily. There is a reason that BATF agents who hunted for non-taxpaying ethanol distillers were called “revenuers”.
The current situation with home distallation units is that the operator promises to add methanol to the output to poison it and prevent human consumption. This may be enforceable with a small number of units, but if any sort of home or local distillation becomes common, the idea that there wouldn’t be massive evasion is delusional. If heavy regulation is used to prevent that, it could easily remove much of the advantage of distributed distallation, negatively affecting the use of fuel ethanol relative to gasoline.
I must say that I am looking forward to the tax fight over fuel ethanol. It would be morbidly amusing to see fuel ethanol fail because of an excessive tax environment, especially with the reaction of the people who want to heavily tax gasoline to adjust behavior.