I don’t know how this will effect rail ethanol shipments. But it seems reasonable that coastal population areas, such as the New York area, will import more of the cheaper stuff from Brazil. After all, the cost of import ethanol will go down by $0.54/gallon while the cost of domestic ethanol will go up by $0.45/gallon.
But, as I said, I don’t know how this is going to play out with regards to rail shipments.
I do not understand how this will all shake out. If the domestic subsidy goes away, the price will rise for the user. Since the mandate will stay, the user will be forced to continue using ethanol. Will the user have the option of buying cheaper ethanol from foreign sources, or will the user be forced to pay the higher price of ethanol not subsidized by the non-ethanol users?
It may be a moot point, as some reports are saying that Brazil cannot keep up with domestic demands for ethalo, and therefore wouldn’t have any to export.
Where ethanol is mandated, in Minnesota, for example, all gas contains ethanol, the price of a gallon of gas will go up. The consumer buying the gas will pay at the pump, insted of paying it through Uncle Sam’s sticky fingers.
45 cents per gallon of ethanol = 4.5 cents per gallon of gas at the pump. Heck, it goes up and down by that amount daily around here.
Where it’s not mandated, in South Dakota, for example, the price of ethanol gas will rise to about the same as non-ethanol gas- a rise of about 4.5 cents per gallon.
Regular gas contains about 10% ethanol now as a replacement for the volatile organic compound that was use as an anti-knock agent. The old organic was an environmental disaster when gas station underground tanks leaked. But it would be a big dis-incentive for E-85 gas. Most studies show ethanol saves no energy, and some studies show it takes more energy to create than it gives back. I just hope now congress forgets about the plan to require 15% ethanol gas, which would require redesigning auto engines, as it would corrode existing engines.
I sure know how this will pan out. CBOT shows price up. Right now, volume is at it’s limit, and from what producers are saying, business as usual. They will get their price.
As long as there is a balance between feedstock, prices, and byproducts, the plants will be profitable. But I could have told you that in 2003, but no one listened!
Like it or not, most places in large metro areas require the blending of ethanol into gas. It is an oxygenate that replaced MTBE. You have no choice.
There are many people who wish ethanol to go away. That would be an expensive mistake. First thing would be an increase in beef to the consumer. Why? Because the DDGs that is fed to cattle now, is far cheaper than whole grain, or milled corn. A lot cheaper. And with the loss of DDGs in the feed market, I can assure you bean meal will go sky high.
Then there is the failure of an industry with hundreds of billions of dollars of debt with banks. How exactly will they absorb that?
Then there is the 10,000 direct production jobs, plus an equal amount of jobs in marketing, transport, and mechanical support.
It one fact you can probably ban on is what ever happens the price for motor fuel with ethanol will go up fpr the consumer. An with the Iranians begging for a fight, anything is a possibility.
Wonder if anyone knows how to build a charcoal burner used to power a car?[:'(]
Unless you can build an pyrolysis reactor on your car, no. But good news, you could use wood and your own private pyrolysis reactor ( and a few extra cleaning parts) to make your own gas. In S. Africa, they gasify coal for their buses. All you need to dispose of the char that remains from the wood.
You know, I hear that theory thrown around all the time, but I don’t think it provides an honest comparison.
I’mwilling to suggest that it takes more energy to produce a gallon of gasoline at my pump, that it does to make a gallon of ethanol. On top of that, I’m not sure that the gallon of gasoline doesn’t cost more.
Consider how much energy and money it takes to pump the oil out of the sand in Kuwait/ Iraq/ Saudi Arabia/ etc., then ship it half way around the earth, refine it, and ship it to my gas station. Factor in the cost to protect the whole system from bad guys along the way, keep open the sea lanes, prop up some tinhorn regime, and fight an occasional war now and then to protect our oil interests. Be sure to account for the long term military costs of that gallon of gas.
When all is said and done, I’d be happy to spend that dollar here at home. Each gallon of ethanol at my pump replaces a gallon of gasoline with roots far away from my hometown. I can drive 2 minutes and be in a cornfield, 20 minutes to be at an ethanol plant.
Well there is a cost of production with each fuel, and I have heard the anti-oil argument that the cost of production should be stated to include every conceivable social cost such as fighting wars for oil. Conveniently, that plays right into the forgone anti-war conclusion that we fight wars for oil. But aside from that, I think the only rational apples-to-apples price comparison can be made on the basis of the free market price of oil versus that of ethanol per B.T.U.
Otherwise, if you include all of the social cost, it immediately throws the cost comparison into a territory that cannot be measured in a way that ca
The free market would then let you juice up your fuel with all the nasty stuff that’s been taken out, because it’s cheaper- more bang for the buck. You’d be able to fill up your tank with gasoline containing MTBE(?) Ethyl (same thing?), lead, nitro, gunpowder, carbs, transfats and cyclamates! Too bad about those folks downwind or downstream from you. Stinks to be them.
I know what you mean, but I don’t think ethanol is being foisted upon us only as a substitute for MTBE. There is a basically a non-oil, pro-renewable objective behind it.
That statement is true. It is a replacement for MTBE. My assumption that there is a larger goal is based upon the calls for increasing the ethanol content in gasoline. Why are there calls for adding ehthanol to diesel fuel?
Regarding the energy to produce oil: The best wells have enough gas pressure drive to produce with out artificial lift (flowing wells); wells with less gas pressure usually use their own casinghead gas to run the pumpjack; and the occasional well without available gas may use electric, but they still must pay for themselves.
Actually, that is exactly why in 2001 Ethanol was suggested, and used, as a replacement for MTBE.
Two things to consider back then. Infrastructure, compatibility. Ethanol can be splash blended, no special tools. Ten percent mixture of ethanol and ninety percent gasoline has been a fixture since the early 1980’s, all issues in vehicles had been solved by then (pun intended). We had been shipping unit trains for decades to places such as Arizona, not something new.
The farmers here saw an opportunity, and they were the early (and only) investors during the bubble of ethanol in 2001, soon followed by Jeff Broin of S. Dakota (Broin’s family first started it’s investment in 1987). That race brought in others who looked for a fast buck, many failed. Who are the big guns today in the Industry? Oil giants, Valero and Koch.
I can say that argument did not work for Professor Pimentel, and it will not work here either. Mainly because old data, outdated farming practices, incorrect production modes, technology changes, genetics, and poor assumptions being used. The ratio as of 2005 is a positive 1.3, and I am sure higher today with continued improvements in enzymes, newer genetics, and use of co-gen or renewable fuels (bio-mass/wind) in process.
There are a lot of tractors that use bio-diesel, which today is made in part from corn oil extracted at ethanol plants (cheaper than bean and other oils right now). Not everyone uses fertilizer, some use hog excrement.