RoswellGrey

Gee. Guess we won't see any E85 Hemis anytime soon...

San Antonio Express-News 9-30-07

The boom in ethanol now is in danger of turning into a bust

Distribution network hasn't kept pace with distilleries.

CLIFFORD KRAUSS
NEW YORK TIMES
NEVADA, Iowa — The ethanol surge of recent years — which spurred a frenzy of distillery construction, record corn prices, rising food prices and hopes of a new future for rural America — may be fading.
Only last year, farmers here spoke of a biofuel gold rush, and they rejoiced as prices for ethanol and the corn used to produce it set records.
But companies and farm cooperatives have built so many distilleries so quickly that the ethanol market suddenly is plagued by a glut, in part because the means to distribute it has not kept pace. The average national ethanol price on the spot market has plunged 30 percent since May, with the decline escalating sharply in the last few weeks.
While generous government support is expected to keep the output of ethanol fuel growing, the poorly planned overexpansion of the industry raises questions about its ability to fulfill the hopes of President Bush and other policymakers to serve as a serious antidote to the nation's heavy reliance on foreign oil.
And if the bust becomes worse, candidates for president could be put on the spot to pledge even more federal support for the industry, particularly here in Iowa, whose caucus in January is the first contest in the presidential nominating process.
Many industry experts say the worst problems are temporary and have been intensified by transportation bottlenecks in getting ethanol from the heartland to the coasts, where it is needed most. And even if some farmers who invested in the plants lose money, most of them are reaping a separate bounty from higher prices for corn and other commodities, which are expected to remain elevated for some time.
The falling price of ethanol comes in sharp contrast to the rise in crude oil prices. Lower ethanol prices help reduce gasoline prices at the pump, where ethanol is available.

RLSH700

The primary problem is that ethanol cannot replace gasoline. We do not have enough crop support to produce enough ethanol even if we dedicated 100% of our corn crop towards it and if you did that, you can kiss any corn products goodbye (corn syrups used in sodas, corn itself for consumption, etc.). I wish it was an answer as I have many family members and friends who are in farming, but it is more a complementary product to gasoline. It improves gasoline's octane while helping to keep the price down a little; however, that is partly due to tax subsidies. The question then is how much per gallon is ethanol costing us despite the price reduction at the pump.

The other problem is E85 only gets 2/3 the mileage that gasoline does. Even at $.55 lower per gallon in my area, it still does not make up the difference. Just check out the difference on this site. www.fueleconomy.gov Find a FFV vehicle you know of and it will compare the fuel efficiency and the price of traveling 25 miles on both.

If the Ethanol industry wants to comback, they should find an alternative use for Ethanol other than cars.

Butanol is the better renewable fuel choice as it does not need special modifications and supposively gets better fuel mileage than either gas or ethanol. There was a thread about it around a year ago, it took a little digging but I found it after about 27 pages. https://dodgechallenger.com/forums/m_3854/tm.htm

Enjoy!