Most in the industry express long-term optimism, others see difficulties and consolidation.
“There is a long backlog in orders for specialized ethanol rail cars to ship the surplus production. Many rail terminals at the ethanol plants do not have spurs large enough to accommodate the long trains that ethanol promoters like to call “virtual pipelines.” And pumps from the storage tanks to the rail cars at the terminals often do not have sufficient capacity to load trains quickly and efficiently.”
In PA, we’ve got a Philadelphia mayor turned governor who’s having 10 ethanol plants built in the state even though we don’t have any significant in-state supply of surplus corn. (Of course, the company building the plants is a big political contributor to him.) The city newspapers and the rest of the media continually praise him for it. The company can’t really make any money on ethanol production in these plants but between Federal and state tax incentives and grants, they can make money just building the plants, even if they don’t produce any ethanol. Meanwhile, the state’s dairy and livestock producers (mainly poultry and pork, very little beef) see their prices for feed going up, up, up. So the farmers loose out, the taxpayers shell out, and the city newspapers gush over his plan.
Any up-date on the Federal subsidy for ethanol? Last I heard it was calculated at 54 cents per gallon.
There are a couple of ethanol plants going in out here that are miles from the nearest rail line.
The NYT city slickers are again a day late and a dollar short. (It isn’t a problem with specialized cars; It’s dedicated cars which goes right back to the original lack of planning/cheapness of the Ag industry.)
Article was on the bottom of the front page of today’s Denver Post and the resulting blogs were not kind. The repetitive question here is why are the taxpayers subsidizing Ag stupidity?
The subsidy for mixing ethanol into gasoline is 51¢/gal. I believe the 54¢/gal. figure you refer to is the tariff on Brazilian ethanol, another prop for U.S. ethanol refiners. In addition there is an ad valorem tariff of 2.5% of the product value. Otherwise, Brazilian ethanol should be very competitive, especially at the Gulf Coast and East Coast refineries.
Yet another example govt-economics disfunction. The beauty of this screw-up is that, if you calculate from the initial plowing of the cornfield and include transportation costs, it takes more BTUs to produce a gallon of ethanol than are contained in the gallon of ethanol and the “carbon footprint” exceeds the emmisions redujction!
Here in Arizona milk has gone up to over $3 per gallon in most stores, and the dairies are blaming it on diversion of corn to produce ethanol, and the cost of diesel fuel.
And on top of all that, there’s less energy in a gallon of the stuff than gas. As a fuel compared to gasoline, Ethanol is crap. Best to use it in strong drinks.
Plus the price of corn has gone so high that small farmers in Mexico are profitable once more. NAFTA caused many of them to stop farming because subsidized US corn was flooding their markets at lower prices.
Now, with greater US efforts to control illegal immigration and farm jobs opening up at home, many Mexicans in the US illegally are self-deporting and going home. The result is no one to help grow and harvest that corn destined for ethanol.
Add to this that the US has only enough arable land to produce ethanol for 10% to 15% of our fuel needs. And we have to burn a lot of fuel to make the ethanol. We could do better on oil usage by some rather simple conservation methods.
While it’s true that ethanol production is inefficient right now, I have no doubt that U.S. companies can develop more efficient production methods. And I believe we have plenty of arable land to support a more efficient ethanol production process.
I was under the impression that one of our problems in the U.S. was too much farmland, and that we are intentionally holding land out of production to keep prices up artificially. Has that problem gone away?
UTLX is the long-time reporting mark of the Union Tank Car Company, formerly a part of the Standard Oil Trust. It is a major car leasing company which has long specialized in tank cars, which constitute an overwhelming majority of its fleet.
Tank cars and covered hoppers will often carry the reporting marks of their owners while painted in the colors and logos of their lessees.
I’m with you on this, I know better ways to produce ethanol will come along sooner than later. What we have today is a lot better than great grandpa’s still, to make alcohol, even if the principle is the same.
There is [or was] a grain-hog operation out in Kansas [I think], which was set up for environmental friendly production. Using solar panels and methane recovery to provide their energy needs, even to produce soy-diesel to run their trucks an tractors. Maybe ethanol could also be produce in the same way.
No, the reserve or set-aside programs are still going but somewhat different than when it started. A lot of the ground is in soil, or wildlife conservation reserve. There is also the wetlands program on low ground prone to flooding.
It was started to help the small family farmers, who needed it, when cost grew faster than commodity prices causing many to go bankrupt. It helped but it wasn’t a cure all. The problem is large corporate or private farms, figured out ways to milk the system for large payoffs.
Do we need them now, not the original program anyway at this time? But, the conservation programs, yes. To lower erosion and improve water quality.
Although no expert, I’m not aware of any subsidies for U.S. corn. What subsidies are out there? Or did you base your statement on an article by some newspaper idiot?
No one to help grow or harvest the corn crop? Corn isn’t planted, plowed or harvested by hand. Up in the Midwest where the bulk of U.S. corn is grown, it is planted and cultivated with large tractors and harvested with large combines, both of which plant/plow/harvest 8 or more rows at the time. Even in the monster fields in that part of the world, you don’t need all that many machines, or therefore operators, to plant and harvest the corn crop.
the biggest problem i see is not enough places to buy the fuel mixture …shell,exon,murphy oil, most gas stations dont sell it. the only place here is farmers co op that sells it, and we have 30 gas stations…need more pumps. but big oil dont want it cutting into their profits too. also sugar cane is best for alcohol… check lattest issue of national geographic magazine for a excellent report…
Last year when we were traveling, we noticed E85 and other ethenol mixtures in Minnesota, WIsconson, Nebraska, and the Dakotas, AND it was available at major oil company stations, not just Co-Ops and farm stores. It seemed to average about 20% less per gallon…which I believe made the $/BTU about the same as gas…
Most other places had the 15% ethanol in the winter mixtures to minimize pollution issues…
Based on this limited survey, I am assuming that the cost of tansporting the Ethanol to distant markets eats away the financial incentive to use Ethanol…but if the cost of gas goes up and the cost of ethanol stays the same (or goes up less), that may change…
Dont forget, to use E85 or E100 in a vehicle, it has to have been specially built for that (The Chevy Flex Fuel vehicles, for instance). Just putting it in any old car wont work…at least, not for long.