This article is from the Gasoline FAQ, by Bruce Hamilton with numerous contributions by others.
The general definition of "renewable" is that the carbon originates from
recent biomass, and thus does not contribute to the increased CO2 emissions.
A truly "long-term" view could claim that fossil fuels are "renewable" on a
100 million year timescale :-). There was a major battle between the
ethanol/ETBE lobby ( agricultural, corn growing ), and the methanol/MTBE
lobby ( oil company, petrochemical ) over an EPA mandate demanding that a
specific percentage of the oxygenates in gasoline are produced from
"renewable" sources [88]. On 28 April 1995 a Federal appeals court
permanently voided the EPA ruling requiring "renewable" oxygenates, thus
fossil-fuel derived oxygenates such as MTBE are acceptable oxygenates [89].
Unfortunately, "renewable" ethanol is not cost competitive when crude oil
is $18/bbl, so a federal subsidy ( $0.54/US Gallon ) and additional state
subsidies ( 11 states - from $0.08(Michigan) to $0.66(Tenn.)/US Gal.) are
provided. Ethanol, and ETBE derived from ethanol, are still likely to be
used in states where subsidies make them competitive with other oxygenates.
 
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