More on Ethanol Issues - Texas Gas to $3?

Trains Magazine General Discussion
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Gas may soon cost $3 a gallon in North Texas; Railroads scrambling to find tank car capacity for ethanol

North Texas motorists are facing a potential spike in gasoline prices in coming weeks comparable to the one after Hurricanes Katrina and Rita last year.

MTBE is being set aside as a fuel additive because of environmental and liability concerns, and railroads and oil companies are struggling to provide enough corn-based ethanol to replace it and allow the Dallas-Fort Worth area to meet federal emissions standards.

The government issued a warning last month, and the markets are responding. The wholesale price of unleaded gasoline rose more than 30 percent to $1.95 per gallon in trading Wednesday on the New York Mercantile Exchange. That is the highest price since it reached $2 per gallon in September and October on shortages caused by damage from the hurricanes.

Add the state and federal taxes of 38.4 cents per gallon in Texas, plus storage and transportation charges, and it’s no surprise that predictions of retail gasoline prices of $2.75 to $3 per gallon by summer have abounded.

The U.S. Department of Energy said last month that because of bottlenecks in the ethanol-supply chain, North Texas and Houston face potential spot shortages of gasoline during the late spring and early summer, when demand typically rises.

“So far all the talk about ethanol has made the price of gasoline go up, and it will probably go up further,” said Bob Harris, a Fort Worth wholesale gasoline distributor.

Lynton Allred, president of the Texas Petroleum Marketers & Convenience Store Association, said of ethanol, “There’s going to be a lot of problems getting the fuel to the user.”

The ethanol will be needed after May05 to replace methyl tertiary butyl ether (MTBE), used as an additive to reduce pollutants during the summer in Dallas-Fort Worth, Houston and other major cities, mostly on the East Coast. MTBE has been used in Houston m

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Heck truckers have been paying over 3 bucks a gallon roughly for years. The oil comapines got caught with the hands in a cookie jar and now all of a sudden they are worried. We have 314 million barrels of oil in storage right now.

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I paid $2.999 this morning in LA - is that close enough to $3.00?

dd

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I paid $2.799 in northern New York. $3 wouldn’t surprise me, even if it wouldn’t exactly make me happy.

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Light Sweet Crude closed at $67 per bbl. yesterday not far below the post Katrina peak of $70 per bbl.

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Except that crude isn’t the problem it is the projected cost of ethanol as an additive in the refining process, as it is in short supply and MTBE cannot be used any longer due to health problems it causes. The crude price is completely irrelevant to this problem. Gas prices will increase because there is insufficient ethanol supply to be used as an additive replacing the MTBE.

LC

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Welcome to the real world, y’all…

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I wonder what the price of gas or E85 will be when all the ethanol plants that are being built or are in the planning stages are completed. What will be our overall dependence be on foreign oil by then? It would be nice to have alternatives.
One good thing whatever the outcome, it’s good for the railroads.

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…Predictions of 2.75 this summer in North Texas…Don’t need to wait until then to find those kinds of prices…Just this week it raised 40 cents here in Muncie, In…to 2.75…!!
The big gouge is on so they can make sure by vacation time they will be up in the 3.00 range, no doubt in my mind at all…

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$68 to fill up my truck yesterday.

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It is gona be a very HOT summer don’t you think?

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The regular unleaded I filled up the tanks with today was $2.369 in Georgia.

We may have state income, high vehicle ad velorum, and other taxes some states don’t have, but our gas taxes are some of the lowest in the nation. I guess it all evens out in the end–whether you pay out of the right or left pocket, the government is going to find a way to get the taxes they need.

Jay

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MTBE is still being produced by most refiners and will be for several weeks, so all of the price increases so far are speculative. If ethanol supply falls short, and it may very well do so, it won’t happen until late May.

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Will any of you guys put the blame where it belongs, namely environmental idiocy? Or will you like most poorly educated Americans continue to blame “big oil” for these bureaucratic-induced problems?

The article is clear on this point: Without the lawsuit shield for MBTE producers, refiners will not produce it so that EPA fuel additive standards can be met. Subsequently, there simply are not enough tankers out there necessary to meet the need to replace MBTE with ethanol, so what happens as a result? Higher pump prices. And who gets the blame? Big Oil. Not the Sierra Club. Not the EPA. Big Oil. And why does Big Oil get the blame? Because that’s what poorly educated Americans are told by CNN, CBS, ABC, New York Times, Washington Post, et al newscasters, while our kids are told the same BS in college, in high schools, even in elementary schools. Subsequently, people complain to their Senators and representatives that Big Oil is gouging the consumer, so who is it who gets hauled before the Senate to explain why gas prices are going up? Big Oil. Not the Sierra Club. Not EPA officials. Big Oil.

For once, just once in my lifetime, I would like to see the Senate grow some collective testicles and haul the leaders of the major environmental groups in front of the Senate to explain why their constant hyperbole is justified, why their continued access to taxpayer subsidies and 501c tax exemptions are justified, why anyone should ever again take any of their “causes” seriously, and why they should not be held accountable (including prison time) for their fraudulent claims?

'Cause that’s what all this is really about.

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Fine haul the enviromental groups before congress. But how do you explain the fact that the Big Oil companies made record profits last year when everyone was getting bent over sans V^^^^^^E at the pumps. They kept reporting profits in teh billions each quarter. Of course you are also the one who wants to raise the weight limts on trucks to 105K so you can have more room on the highway word to the wise use the brain.

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If we need to bring the enviromental groups before congress hearings, so be it…bring them on…but as stated above, we are all seeing these not only large profits of the big Oil Co’s but obscene HIGH profits…!!! So don’t pass them off as not envolved. I don’t think many of us will buy that. Coming up to near a year ago we had all kinds of happenings going on to blame it on…Hurricanes, equipment destroyed and so on but now the price is once again reaching those levels and we’ve had none of that yet this season…and so on…

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Having grown up in a heavy industrial area with lots of steel mills, oil refineries and filthy air and water, the ability to breathe clean air is quite important to me and environmental restrictions serve a useful purpose. The last time I looked, most of the area around Butte, MONTANA is an environmental disaster area due to a lack of concern by the mining firms that ravished the area until the mines played out. For further thought, consider reading “Ecocide”, by W. Bruce Lincoln. It describes the poisoning of the former Soviet Union when envrionmental concerns werre brushed aside.

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As strange as it may seem, I agree with Dave, in part.
The “green” groups have played a major part in the higher prices…but keep in mind those same green groups are, in reality, us.

It all boils down to what we, collectively, will put up with.

If we decide that MTBE is something we don’t want, so be it.

Keep in mind that all of this is relative to your own personal viewpoint.

After all, everything that comes out of an automobiles exhaust pipe, with the exception of the water vapor, is most likely something none of us “want” to breath…but we traded off pristine air in exchange for the convenience of the automobile and the products and goods the industrial revolution brought about.

Until recently, most of us were happy with the trade off, but now, as technology has advanced, we suddenly want “clean” air and “pure” water…(and a car to drive to the corner store.)

Come on folks, if we really wanted both, we would all be riding horses to work, if there was a place left to work, or ride too.

So, what it boils down to is what are you willing to trade, in exchange for the ability to remain as mobile as we are right now?
Cleaner air but a higher price at the pump, or cheap gas, and more pollution?

Mass transit?
Maybe…
Ethanol as a solution?
No, a stop gap maybe, but not the savior we are looking for.

Return to high density population/ work centers?

Probably…what was the burbs down here 10 years ago is now so densely packed that the new suburbia is a two hour drive from the city limits, and most of the jobs are still within the city limits and along the beltway.

So, what are you willing to trade in on cheap gas?

Ed

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Check the tax dollars that government got from oil sells last year. It far out strips the “wind fall” profits that the oil companies supposedly recieved from gas sells last year. Where is the congressional investigation on the governments “wind fall”?

Jay

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So our buddies at big OIL have decided to stop using MBTE because they care about our health and welfare? It is only thru the threats of lawsuits that they decided to stop using MBTE which they have know to be toxic for years. Looks like it will be a smooth transition from MBTE to Ethanol. NOT!!! The reason the price of gas is high is not oil supply but refinary capacity. There has not been a new refinery brought on line in over 27 years and many have been shuttered. No one but BIG OIL is to blame.[2c] As always ENJOY