Will ethanol E85 catch on in the US? Will we Live Green and Go Yellow?

seniorjose · June 2006

Vast Majority of Americans Want More Ethanol
New Public Opinion Poll Shows 78% Support Expanding Use of Ethanol

June 2, 2006

Washington, DC  New data from the polling firm Public Opinion Strategies shows that 78 percent of Americans support increasing the use of ethanol and two-thirds of Americans support the increased use of biofuels in general. Additional results show that 91 percent of Americans feel the country is facing an energy crisis and 53 percent believe we should diversify our energy supply by utilizing alternative energy sources like ethanol.
These results clearly reflect the growing enthusiasm for ethanol and other biofuels we have seen in the past year, said Renewable Fuels Association President Bob Dinneen. From the farmer in the field to the business owner on Main Street to consumers at the pump, Americans are realizing that we need to do something different when it comes to meeting our energy needs. Ethanol and renewable fuels are ready today to start America down a path of greater energy independence.

Polling results from Phoenix Marketing International earlier this year showed that more than 90 percent of Americans would prefer a flexible fuel vehicle (FFV), one capable of running on gasoline and ethanol blends up to 85 percent (E85). A recent study done by Phoenix for the American Lung Association of Minnesota found that 85 percent of respondents would prefer a fueling company that offers E85 under its canopies.

In addition, the Indianapolis 500 this year was powered by a 10 percent ethanol blend. The race and the entire Indy Racing League will be using 100 percent ethanol in 2007.
Taken out of context, polling results can have very little meaning, said Dinneen. But given the climate in this country and the extensive interest we have seen in ethanol and renewable fuels, it is clear that this data demonstrates the growing desire of American drivers for cleaner-burning, domestically-produced ethanol.

Currently, the U.S. ethanol industry boasts 101 biorefineries in production with an annual capacity of more than 4.7 billion gallons. An additional 32 biorefineries are currently being built and 6 are expanding, with a capacity of nearly 2 billion gallons.

The poll was conducted for the Energy Future Coalition.

gagrice · June 2006

Corn yields and processing technologies have improved significantly over the past 20 years

Through the use of way more natural gas to produce the fertilizer used. No free lunch no matter what ADM promises. So what happened to the other 38 BTUs? One of your earlier posts said for 1 unit of energy you get 1.76 units of ethanol. As was stated many times the ratio is all over the board. As long as the crop used is not damaging to the environment, nor is the processing, that is fine. So far it is not the case. High yield corn production and ethanol processing are both big polluters.

snakeweasel · June 2006

Do you have a link for that poll? Most people I know when they find out E85 actually costs more per mile won't touch the stuff.

gagrice · June 2006

Dan Becker is director for the Sierra Club's global warming and energy program.

A House/Senate energy conference committee is preparing to disgorge a 1,700-page legislative abomination that should cause both the Left and Right to choke.

Ethanol producers are another bunch that will make out like thieves. Apparently, the lavish subsidies bestowed on that industry over the past couple of decades haven't been enough to placate farmers given that the price of corn has dropped by nearly 50 percent since 1985 even while ethanol production has doubled. So Congress and the administration are preparing to put the hammer down to further artificially increase demand for corn with a combination of new ethanol subsidies and preferences.

Make no mistake -- the ethanol program is about nothing other than fattening ADM and other ethanol producers at the expense of others. And ADM counts on the farmers who grow the corn to provide the political muscle. Ethanol does nothing to improve air quality and only uses slightly less oil to manufacture than it displaces upon use. Still, the Midwest is a region that throws its presidential and congressional votes to those that promise farmers the biggest sack of federal loot -- so ethanol we shall have regardless of its merit as a fuel source.

That is the simple truth from one of the most respected environmental groups in the USA. This was part of the push to throw out the flawed energy bill passed last year.

rorr · June 2006

"Currently, the U.S. ethanol industry boasts 101 biorefineries in production with an annual capacity of more than 4.7 billion gallons. An additional 32 biorefineries are currently being built and 6 are expanding, with a capacity of nearly 2 billion gallons. "

Cool.

So, we're headed toward a total capacity of 6.7 billion gallons per year? I see trouble ahead.

Consider: the U.S. DAILY consumption of gasoline was at around 382.4 million gallons/day in 2004

http://www.eia.doe.gov/neic/quickfacts/quickoil.html#anote

That equates to an ANNUAL consumption of around 140 BILLION gallons of gasoline.

Hmmm, just to meet the requirements for E10, we need to have around 14 Billion gallons of ethanol a year - less than HALF what you say we'll be producing. :surprise:

So, to meet the federal mandates for E10 (let alone moving toward E85), does this mean that NOW we'll be importing ethanol? :confuse:

rorr · June 2006

"Most people I know when they find out E85 actually costs more per mile won't touch the stuff."

I wonder what the wonderfully in tune folks would think when they find out that the cost at the pump doesn't reflect the $0.51/gallon tax incentive handed to the domestic ethanol industry by Washington.

Without that little detail, the pump prices for ethanol would be COMPLETELY out of sight. I guess you might as well buy the E85; hell, you've already paid for a good chunk of it....

More fun facts here:

http://www.taxpayer.net/energy/ethanol.htm

gagrice · June 2006

Well we could maybe import a little from Brazil. There is that 56 cents per gallon tariff on foriegn ethanol to contend with. Then when you realize that we already produce more ethanol than Brazil. It would be tough for them to make a dent in our mandated need. All or ours and Brazil's ethanol will not meet the mandated 10% we need. Maybe we should buy sugar cane from Cuba to put in our stills. Probably gain another billion barrels there.

gagrice · June 2006

This message was sent to the Pennsylvania Legislature when they thought about feeding at the ethanol trough.

It should be noted that Pennsylvania is already a net importer of corn; i.e., at this time, Pennsylvania does not grow enough corn to satisfy current needs for human food production and livestock feed. Fuel ethanol production would remove available livestock feed resources.

Ethanol production is inefficient with 29% more fossil fueled energy needed to produce a gallon of ethanol, than is available in that gallon of ethanol for energy use. The raising of corn increases soil erosion, depletes soil nutrients and uses more herbicides, pesticides and nitrogen fertilizers than any other crop. Ethanol evaporates easily, causing increases in summertime ozone smog pollution in higher population areas, such as Philadelphia, Lancaster, Harrisburg and Pittsburgh. Ethanol blended with gasoline is more volatile (evaporates more easily) than gasoline with other additives, and ethanol blends combined with other gasoline in the vehicle gas tank can be more volatile still, putting significantly more pollution into the air. Ethanol blends also increase VOC emissions from gasoline, one of major necessary components that combine to create polluting ground level ozone smog.

The state of Wisconsin reported in 2002 that offensive odors will be expected to result from production and will be in evidence from ½ mile to 1 mile from the source. So severe was the problem that they recommended and required an "Odor Mitigation Plan" for a proposed facility. Production causes pollution byproducts to be emitted into the air & include carcinogenic formaldehyde and acetic acid, and methanol, a federally classified hazardous pollutant. The Philadelphia Inquirier reported on May 4, 2002 that EPA had issued a letter to the ethanol industrys trade group identifying problems with plants releasing air pollutants in quantities many times greater than originally measured, with the problem being common to "...most, if not all, ethanol facilities..." In the air, ethanol itself will break down into highly toxic constituents (acetaldehyde and peroxyacetylnitrates [PAN] ), and Pennsylvania has yet to assess the effects of public exposure.

Ethanol has been evaluated for the effect of its use here in the northeast United States; ethanol degrades quickly in the environment and is therefore of concern because:

* At higher concentrations, ethanol can make other gasoline components more soluble in groundwater;
* In gasoline spills, ethanol can delay the degradation of other more toxic substances; and
* Ethanol can cause gasoline to spread out laterally over greater distances as a layer on top of the water table.
* The breakdown of ethanol in surface waters could potentially result in the consumption of significant quantities of dissolved oxygen and could result in fish kills, jeopardizing the local tourism industry;
* Due to ethanols higher solubility, current treatment technologies such as adsorptive filters will not be effective;
* The hazard potential for ethanol in drinking water is higher compared to other oxygenates from gasoline that leak into groundwater and drinking water systems, because of irreversible damage possible from repeated high level exposures.

To be continued;

gagrice · June 2006

There are health effects:

* ethanol itself will break down into highly toxic constituents (acetaldehyde and peroxyacetylnitrates [PAN] ), and Pennsylvania has yet to assess the effects of public exposure.
* Air toxics and ozone precursor pollution emissions into the air will increase if ethanol replaces current oxygenates in gasoline.

Sincerely,
Nancy F. Parks
Chair, Clean Air Committee
Pennsylvania Chapter
Sierra Club

socala4 · June 2006

I won't argue with the EPA, but that misses the point vis-a-vis oil consumption.

Let's take a hypothetical car that gets an average of 25 mpg with gasoline. Let's presume that the same car loses 30% of its fuel economy when operated with E85, resulting in average fuel economy of 17.5 mpg. (25 mpg X 70% = 17.5). Drive this car for 12,000 miles, and this is the resulting fuel usage:

Gas - 480 gallons (12,000 miles / 25 mpg = 480)
E85 - 685.7 gallons (12,000 miles / 17.5 mpg = 685.7)

If your agenda is to reduce the amount of imported oil used/ consumed, then E85 is a useful means of doing so, assuming that you can refine enough of it:

Gas: 480 gallons X 100% petroluem product = 480 gallons of gasoline used

E85: 685.7 gallons X 15% petroleum product = 102.9 gallons of gasoline used

In this example, the use of E85 reduces the use of gasoline by 377.1 gallons, or 78.6%. If the E85 mileage was 25% lower, then the use of gasoline would decline by 80%.

If you believe that the US pays a significant political and economic cost for its high dependency upon oil (which today's headlines should make obvious), then it is obvious that a solution that includes reduced petroleum consumption is a net positive for US national security.

This does not mean that ethanol is a magic bullet, and certainly the pricing disparity would need to be addressed in order to make this work for the consumer. (Increased production could be expected to lower prices, and fuel taxes could be adjusted accordingly to change the incentives.) But the positive implications on foreign policy are clear, even if some may oversell the benefits. Combine a significant investment this with hybrid technology and other alternatives, and the political problems of oil might be dealt with. The status quo that we have now certainly won't fix it.

gagrice · June 2006

In this example, the use of E85 reduces the use of gasoline by 377.1 gallons

There is actually a negative reduction in the use of E85 vs regular gas. Depending on the study, if we use the DOE 1 gallon of fossil fuel used to make 1.38 gallons of ethanol. Where is the savings in fossil fuel. It takes about that same 1.38 gallons of ethanol to go as far as 1 gallon of gas. It is making the oil companies and Mega Agri businesses rich. Plus of course it is destroying the environment.

socala4 · June 2006

There is actually a negative reduction in the use of E85 vs regular gas.

That's a strawman argument, because it fails to account for the petroleum needed to produce the other alternatives. It's not as if gasoline production consumes zero units of petroleum.

The fair and reasonable way to compare these would be to compare the amount of petroleum required to produce and distribute a unit of E85 with those of the alternatives, and then perform a net-net comparison of the two.

It would also be preferable to look at non-corn alternatives, and to not assume that corn is the only crop to be used to produce ethanol.

rorr · June 2006

"Depending on the study, if we use the DOE 1 gallon of fossil fuel used to make 1.38 gallons of ethanol. Where is the savings in fossil fuel."

The savings comes from the fact that the fossil fuel doesn't HAVE to be in the form of imported crude oil but could be in the form of coal (of which we have an abundant supply).

Perhaps that's one of the underlying reasons why the Sierra Club has their underoos in a wad over massive ethanol production. They know it would entail a large increase in the consumption of coal.

gagrice · June 2006

They know it would entail a large increase in the consumption of coal.

That is a fact and rightly so. One of the newest and largest ethanol production facilities in Iowa is coal fired. I think the jury is still out on the use of coal. It does produce large amounts of CO2 that are not absorbed by the corn growing in the field. Does it cause more pollution? That is a good question. The Sierra Club in their arguments against the Glen Canyon Dam in the 1960s used the fact that huge reserves of coal lie in what is now Lake Powell. They went so far as to say we could use the coal to power America for several thousand years. Now they don't want to use coal.

gagrice · June 2006

That's a strawman argument, because it fails to account for the petroleum needed to produce the other alternatives. It's not as if gasoline production consumes zero units of petroleum.

That is correct. I guess I feel the crop land would better serve us raising crops that are made into biodiesel. A fuel that can run a tractor or a truck or a car or a furnace. It can be put in a pipeline and transported across country economically. It is much safer to the environment. It can be produced from much less invasive crops than corn. The last study I read had about 1 gallon of fossil fuel to make 3.34 gallons of biodiesel. A much better ratio. As I posted earlier there are more places in Oregon selling biodiesel than E85 pumps in 10 Western states. I don't care what they do in the Midwest, that is their problem to solve. I do care what happens in my neighborhood.

rorr · June 2006

"It can be produced from much less invasive crops than corn. The last study I read had about 1 gallon of fossil fuel to make 3.34 gallons of biodiesel. A much better ratio."

Well YEAH, but does biodiesel benefit the corn industry like ethanol?

I think NOT! C'mon gagrice, get with the program here. The public LOVES ethanol. All those polls prove it......

socala4 · June 2006

I have no problem with biodiesel, and can't see why it can't/ shouldn't be part of an overall solution to reducing oil consumption.

That being said, I haven't seen you go to nearly the same amount of effort to calculate the cost of producing biodiesel that you have for ethanol, and we can't compare them intelligently if we don't know the likely costs and benefits of both. Even if you think that we can run the country off of the waste oil generated by Chinese restaurants, it would be good to know the cost of collecting that oil when comparing it to the alternatives.

The primary problem that I see for biodiesel is one of adoption, because most Americans prefer gasoline-engined cars, diesels suffer from the stigma of being slow and dirty. Toyota was smart to realize that despite any perceived technology risks that it would be easier to convince Americans to accept a gasoline-based dual-engine system than it would to get them to use diesel. Biodiesel stands a better short-run chance of succeeding in Europe, where diesel cars are popular and lower diesel fuel taxes have encouraged their use, and where public consciousness about oil consumption is greater, than it does in North America where the mentality is more geared toward consumption and diesels are unpopular.

Americans understand gasoline, so alternatives that include some use of gasoline should stand a better chance of adoption here in the US. And it is possible to move to E10 with relative ease and in a relatively short period of time, which would create some very modest but relatively immediate benefit.

tpe · June 2006

And it is possible to move to E10 with relative ease and in a relatively short period of time, which would create some very modest but relatively immediate benefit.

Well right now we produce about 5 billion gallons of ethanol per year in this country. We consume over 140 billion gallons of gasoline. I'm not a math genius but I don't think we have enough ethanol to all be burning E10 in our cars, maybe E4. The biggest ethanol proponents feel that production could be up to 15 billion gallons by 2015. If our consumption increases by the same 2% per year, that has been the trend, we might have enough ethanol to hypothetically all be burning E8 by 2015 but we would still be burning more gasoline than we are today. This is not a solution, not now and not in the near or distant future. If its even a partial solution its effect will be so negligible that it can't possibly justify the cost in government subsidies. If the government is going to invest this amount of money toward energy independence there's got to be better "bang for buck" options.

In addition, i think that FFVs are going to be a hard sell. I realize that they probably won't cost much more but the average driver that is used to filling up his car every 8 days is not going to like the idea of having to fill up every 6 days, even if it's break even from a cost perspective. I personally hate the process of filling up. I would pay more for a fuel that would let me go longer between fill-ups even if I ultimately ended up paying more per year for the fuel. From what I've read this is one of the reasons that Toyota is dragging its feet in terms of FFVs.

gagrice · June 2006

That being said, I haven't seen you go to nearly the same amount of effort to calculate the cost of producing biodiesel that you have for ethanol

You have hung out in the wrong threads for the last 7 years then. My thrust and research is mostly about the pros and cons of biodiesel. There are companies in the USA that are making money on biodiesel without the subsidies now offered. Pacific Biodiesel of Hawaii is a great example. The same people that got Willie Nelson using B100 in both his Hawaii vehicles and the start of Bio-Willie fuel.

Virgin vegetable oil can be harvested from many oil feedstock plants like soybeans, sunflower seeds, rape seeds, palm oil and even some types of algae. Recycled vegetable oil from local restaurants and other used sources are also a useful reservoir of renewable fuel for diesel engines as approximately 4.5 billion gallons per year of used vegetable oil is available in the USA.

We are dumping about the same amount of used cooking oil as we are now producing ethanol. There is very little that needs to be done to use that cooking oil in a diesel engine or an oil stove. I would say it is better to use that old cooking oil to power a truck or car than dump it into the land fills across America. Biodiesel can be produced on any level from a single car garage to a mega million dollar production facility. That is one reason the big Agri businesses go for the Ethanol. It is strictly high tech BIG Bucks. That way they eliminate the little guy right from the get go.

As far as need there are a lot of trucks on the highways of America. How many are using gas? Not many. That is the reason that Willie Nelson took his Bio-Willie right to where it is needed. At the truck stops of America.

I am sure that biodiesel is far more available across the country than E85. It is much easier to store and sell than E85. No special tanks or pumps needed. It can be mixed in any percentage with regular diesel or number one kerosene.

E10 being mandated is a good reason to NOT buy a gas vehicle in my opinion.

fireball1 · June 2006

Your math is fine and dandy, but you forget all the fossil fuels that go into GROWING the corn and PROCESSING the ethanol. Corn needs an incredible amount of nitrate fertilizer, which is made from natural gas -- a fossil fuel. Corn also must be transported to the ethanol plant, which uses fossil fuels to make the fuel. The ethanol, then, often must be transported out of the Midwest to reach its destinations. Another wrench in your equation -- Some corn is irrigated, and it takes fossil fuels to pump the water to the surface.

None of this even gets into the significant environmental damage -- how can you measure the value of our topsoil? Our groundwater? To me, corn ethanol is a pie-in-the-sky solution that has the corn and ethanol lobbies and politicians dancing in the streets. Meanwhile, taxpayers get pie in the face.

fireball1 · June 2006

I saw this same study earlier today. I turned around and asked a couple co-workers what they thought of ethanol. "Oh, I don't know. I guess it's a good thing." When I pressed them, they couldn't pinpoint anything in the corn-to-ethanol-to pump-to vehicle equation. They knew nothing about the subsidies. Nothing about the mileage efficiency. Nothing about the energy-intense corn-growing process.

The average American Jane and Joe -- the ones who overwhelmingly support ethanol in this poll -- don't follow the news enough to know they're getting the shaft on corn ethanol. Heck, half of them can't find Iraq on a map.

socala4 · June 2006

I don't see why you're all fixated on corn, when there is other biomass that can be used to produce ethanol. Using corn is simply another strawman argument. You would like to claim that ethanol doesn't make sense simply because of only one crop that can be used to produce it. That may or may not be a bona fide argument against the use of corn as a primary crop for ethanol production, but that is not an argument against ethanol itself.

In any case, I am not particularly an advocate of any one solution (I don't see any one magic answer to the overall problem.) And my primary driver has been a political one, not an environmental one -- I am not suggesting that ethanol is a benefit to the environment, but that petroleum consumption needs to be decreased as a political imperative.

I'd like to see some answers that make sense and can be implemented within the next 3-7 years with some reasonably expected benefit. I doubt that one particular fuel or technology provides a magic bullet solution to these questions.

socala4 · June 2006

E10 being mandated is a good reason to NOT buy a gas vehicle in my opinion.

You've not addressed the fact that about 97% of cars sold in the US today run on gasoline. Unless you can (a) convince and/or force the American consumer to use diesel,(b) ensure a sufficient supply of biodiesel and (c) distribute that fuel to consumers, then it is a non-starter.

Again, I have no problem with biodiesel, but you have neither assessed the costs nor figured out how you're going to get Americans to use it. Until this is accomplished, the whole thing is just as much of a pipe dream as is every other proposal.

socala4 · June 2006

Obviously, we don't currently have sufficient ethanol production capacity to distribute E10 to everyone today. But any solution that doesn't involve getting people to ride the bus is going to have lag time built into the implementation, so that's not a reason against ethanol or any other technology.

In addition, i think that FFVs are going to be a hard sell.

I think that the sell will be quite easy IF the current pricing disparity is resolved and distibution becomes widespread. It would need to be marketed with some homegrown patriotic / Free Yerself From Them A-rabs sort of spin, but it could certainly be done with help from above (in this case, Uncle Sam, not divine intervention.)

From what I've read this is one of the reasons that Toyota is dragging its feet in terms of FFVs.

I'm going to speculate that Toyota has opposed FFV because it has invested itself in gaining first-mover advantage in hybrid technology, and wants to have the competitive advantage of branding itself as a leader in this area. It also doesn't want to help to create an advantage to rival GM, which has taken up the mantle of FFV as its alternative. Good marketing on Toyota's part, but not necessarily a reflection on the technology itself. (Somehow, Toyota is selling cars in Brazil without any such trepidations...)

gagrice · June 2006

They knew nothing about the subsidies

People are clueless which makes the poll worthless. You would be more likely to find someone that knew the leader of the Czech Republic than what E85 is or does.

gagrice · June 2006

I don't see why you're all fixated on corn, when there is other biomass that can be used to produce ethanol.

Yeah I heard the President mention Switchgrass. Is their a test plant in existence that will make ethanol from Switchgrass? I say no. Unless you have one in your back yard. Iogen has the only working model of a biomass to ethanol plant that I know of. It is still in the experimental stages. They hope to build a full-scale processing plant if they can get someone with 350 million to front them. So corn IS the primary source of ethanol production in the US. And it is not that great from many levels. I have never said that ethanol is not of any value. I just say they need to do more research before Mandating ethanol. It is running the price of our gas up because ethanol is in short supply.

fireball1 · June 2006

Admittedly, I am at times fixated on corn. But then, I live in the middle of Nebraska and EVERYONE is fixated on corn as the solution to every problem in America. Anyone who says anything anti-corn in Nebraska (and Iowa, I think) is crucified and branded as anti-American. I agree, ethanol has promise to ease our energy problem. I think (and pray) that other fuelstuffs will be online within just three years. A straw biomass ethanol plant may be built in Idaho by next year. Straw is not much more energy efficient than corn, but it's a step in the right direction.

I have been bothered by our fixation on corn for years now. We can thank our corn lobby for not only ethanol, but high-fructose corn syrup and a whole mess of subsidies that have bent our priorities out of whack. As the system now stands, we overproduce corn to (1) fatten cattle as fast as we can, within 9 months; (2) make it into ethanol so we can claim we're reducing our dependence on foreign oil, and (3) to keep the Corn Growers, the Farm Bureau and the Cattlemen happy.

A Nebraskan senatorial candidate -- a Democrat, no less -- has promised us that Nebraska fields of corn will replace foreign oil fields. He wants America on 75 percent ethanol by 2020. As he says these things, he points to a corn field. How crazy is that? We need a dose of reality. Most of all, we need to address our energy problem from all angles. Conservation is the absolute easiest way to reduce our dependence on foreign oil. They conserved for the good old U.S. of A. in the 1930s and during World War II -- can't we do just a little bit of that now? Locally, our community is finally getting around to considering a public transportation system. I find that much more exciting than ethanol from corn (my fixation again).

The hypocrisy of many Americans is incredible. We have SUV drivers with flags waving and "Support out Troops" bumper stickers. Are they truly patriotic? I go to church and listen to folks complain about the high price of gas and then I go out and notice that the parking lot is half-full of SUVs, pickups and even a Hummer!

If we're talking REAL solutions, let's ration gas like we did in the 1940s. Or let's tax the hell out of it. Something to encourage conservation. Our farm policy is pathetic because it encourages fossil fuel consumption. The hypocrisy is everywhere. Just wait until the Iowa primary in a couple years and listen to the candidates proclaim the magnificence of maize!

Sorry to ramble on corn, but I become a bit disenfranchised when I drive out in the dry parts of western Nebraska (15-17 inches of rain a year, on average) and see center pivots running all day, irrigating sandy soil when the temperature is 100 degrees. Our farm bill subsidies for corn (and cotton and other crops) have long since turned counterproductive for our food system and, to a lesser degree, our energy system. We can do better than this. We need some gutty leaders, whatever their party.

You are right, ethanol has a role. But let's not suck our thumbs on corn dependence and take our sweet time getting to cellulose, landfill waste, livestock waste, whatever. We need a little more urgency.

gagrice · June 2006

but you have neither assessed the costs nor figured out how you're going to get Americans to use it.

It is being used extensively. I dare say more B100 is being used than E85. B20 is very popular throughout the US and very heavily used in the farm communities. It is cheaper than number 2 diesel in places like South Dakota. Plus there is no loss of mileage like with E85.

State Fleets  AZ, CO, HI, IL, MI, MO, MS, TN, VA, WA At least 10 states considering some form of mandate or encouragement to use biodiesel in fleets.

gagrice · June 2006

Switch to ethanol blends might be costly at pump
Governor evaluates contrasting forecasts
Wednesday, June 07, 2006
By Laura Maggi
Capital bureau
BATON ROUGE -- If a proposal to require that ethanol-blended gasoline be sold in Louisiana were in effect today, consumers almost certainly would be spending more at the gas pump.

This has led Gov. Kathleen Blanco, whose staff lobbied on behalf of the proposal touted by Agriculture Commissioner Bob Odom, to take another look at House Bill 685. Business groups have highlighted the mandate's potential impact on gas prices in urging Blanco to veto the legislation.

"The one piece she has asked us to thoroughly assess is gas prices," said Jimmy Clarke, Blanco's chief of staff, who added that the governor is still leaning toward signing the legislation. The governor has until Monday to determine whether to sign the bill or veto it before it automatically becomes law without her signature.

The legislation, sponsored by Rep. Francis Thompson, D-Delhi, would require that once the production of ethanol and biodiesel in Louisiana reaches a certain level, 2 percent of the total gas and diesel sold in the state must be so-called renewable fuels. How this mandate would be implemented is not clear, as the bill gives broad authority to Odom to develop rules and regulations.

Proponents of the mandate argue that it will create a guaranteed market for ethanol in Louisiana, therefore promoting the development of biofuels facilities in the state that will distill fuel from agricultural products. They have played down any potential price increase, saying that the cost of ethanol-blended gasoline sold in states with ethanol production tends to be on par with that of regular gasoline.

Ethanol can be distilled from a wide variety of crops, although most of the fuel in the United States is made from corn. There are no ethanol plants in Louisiana, although a few firms are exploring the idea. A biodiesel manufacturer began operations in Grant Parish this spring.

Pricier option

Ethanol is more expensive than regular unleaded gasoline, which means that blends are typically pricier. In the last week of May, for example, reformulated gasoline that usually contains 5.7 percent ethanol sold in the Midwest and Gulf Coast for an average of 11 cents to 13 cents more per gallon, according to the Energy Information Administration, a division of the U.S. Department of Energy.

snakeweasel · June 2006

I won't argue with the EPA, but that misses the point vis-a-vis oil consumption.

This is not about oil consumption its about how much does it cost to run a car with E85. People will act in their own self interest and that is strongly guided by the pocket book. Generally speaking once people realize that the cost per mile is greater they will abandon E85. Yes there will be a very small percentage that will look at it with the reduction of oil consumption in mind, but that is a luxury that many cannot afford.

Hence MPG is extremely important, or more importantly cost per mile driven. As long as the cost per mile for E85 is more than it is for gasoline (or perceived as such) E85 is not a viable alternative because people as a whole will try to minimize their costs. The problem is is that without massive government subsidies E85 will never be low enough to make it cost effective.

I would say that for E85 to be a more acceptable overall the cost per mile driven would have to be about 5% or more less than gasoline. That is because of the current lack of distribution (got to go out of your way to get it) along with more frequent fill ups.

socala4 · June 2006

This is not about oil consumption its about how much does it cost to run a car with E85.

The costs need not be static, they can be lowered by increased production and distribution, and incentivized by modifications to taxation policies. Just as Europeans have motivated consumers to opt for diesel and Australians have encourage consumption of LPG with pricing and tax policies, the same can be done for ethanol and/or whatever alternatives that the government may favor.

Again, the US taxpayer and military pay a large price for the country's foreign policy as it relates to oil, this is not necessarily just an issue of pump prices as of today. If the financial cost of the Iraq war was financed by a gas tax, it would increase the price of gas by $0.75 per gallon, and that wouldn't include either the war dead or the drag on the economy created by high fuel prices which are the byproduct of both the war and increasing demand for oil.

Oil is a much more expensive product than the pump price reflects, and shapes the very essence of US foreign policy. The fact that we are all paying for policies oriented toward oil through our income taxes and deficit spending does not make it any cheaper. The nation will have to determine whether it is willing to continue to divert massive resources to purchase petroleum from dictatorships and to protect our supply goals with little regard for how drastically this affects us all.

tpe · June 2006

We need some gutty leaders, whatever their party.

John McCain recently appeared in Iowa and in a speech he expressed opposition to all farm subsidies, including ethanol. I don't want to discuss the pros and cons of John McCain but I agree with you; we need leaders that are willing to deliver an unpopular message. Then we need voters that are smart enough to realize sacrificing in the short term can lead to long term gains. Probably unrealistic.

tpe · June 2006

I agree with a lot of what you've said, particularly the part about the price we pay for gas doesn't reflect the true cost. You seem to be advocating a system where the same can be said about ethanol in that the price at the pump won't reflect the actual cost. So let's stop doing this. Pass on the war costs to consumers of gas/petroleum, which will include the farmers. Eliminate the farm subsidies for ethanol production. I doubt that ethanol will suddenly be attractive from a price perspective. What will happen is that with the consumer paying the full price we will probably see gas and or ethanol at around $4/gallon. That will be a powerful incentive to come up with a real solution. Not to mention that any policy designed to artificially lower the price of fuel at the pump is contrary to encouraging conservation.

snakeweasel · June 2006

The costs need not be static, they can be lowered by increased production and distribution, and incentivized by modifications to taxation policies.

I know the costs need not be static, also increased production and distribution does not always decrease prices. Ethanol has to be made from something, right now mostly corn, to increase ethanol production would increase the demand for corn, an increased demand will increase costs. Furthermore it is questionable if we can produce enough ethanol to switch over to E85 completely.

As for taxation policies, that should never be done as it promotes policies that are economically unsound. As it stands now E85 is heavily subsidized by the government.

Just as Europeans have motivated consumers to opt for diesel

Its government interference that is keeping diesel off the US roadways. Without tax incentives and/or subsidation diesel would be an economically viable alternative since it would be at a cost that is less per mile than gasoline. Its environmental concerns and increasing regulations (more strict for 2007) on diesel engines that are keeping diesel off US highways in large numbers.

Again, the US taxpayer and military pay a large price for the country's foreign policy as it relates to oil, this is not necessarily just an issue of pump prices as of today.

I am not debating that and its not germane to this conversation.

It is still a fact that E85 is more expensive to use and as long as it remains so it will have limited success.

gagrice · June 2006

It is still a fact that E85 is more expensive to use and as long as it remains so it will have limited success.

All this talk of using E85 is kind of useless. The producers of ethanol cannot even keep up with the demand for ethanol as an oxygenator. If they cannot supply E5 to E10 as a replacement for MTBE, how are they going to supply E85 for FFVs?

Even if you live in MN where E85 is taxed at a lower rate than unleaded regular. It will cost you about $4 more to drive 100 miles on E85 than on regular. Or about $50 a month more to be corny.

seniorjose · June 2006

E85, E95, E10 and Biodiesel are a solution from Americans, by Americans using American know-how to solve the foreign oil cartel's extortion policies as it relates to America --NOW!

As far as the Sierra Club is concerned, I chuckle when I see that they have suddenly switched to an anti-green fuel agenda. They are often totally confused by the truth.

Trying to smear politicians and companies with the broad brush of anti-American hatred is always with us, people who only tear down and have no answers for anything. Negativity did not build this country and will not solve our energy crisis.

This forum is to discuss E85 as a fuel, there are many pros and cons that are legitimate concerns with thinking Americans.

As an aside, it was noted today on BLOOMBERG TV that Wendy's will switch from "fatty" fats to Soy and Corn oil to prepare their food because they want to increase the healthiness of their product.

Another aside: VW has canceled all of their 2007 diesels that they were going to import to the USA. Jeep has canceled their diesel version of the Jeep Liberty...thank you California...now is CA going to cancel our 18 wheeler diesels also? Sounds like the Biodiesel plants will only be for truckers fuel!

seniorjose · June 2006

Ford, Chrysler, GM speak up for ethanol
by EPM Associate Editor Jessica Williams

The Big Three automakersFord Motor Co., Chrysler and General Motors (GM)visited Capitol Hill on May 18 to encourage Congress to pass legislation that would make ethanol fuel more widely available.

Chrysler Group President and CEO Tom LaSorda, Ford Motor Co. Chairman and CEO Bill Ford, and General Motors Chairman and CEO Rick Wagoner said their companies supported the 25x25 Initiative, an effort led by the Energy Future Coalition and supported by agricultural and forestry groups to have 25 percent of U.S. transportation needs met by renewable fuels by 2025. The three companies also discussed plans to increase production of flexible-fuel vehicles (FFVs) for consumer scale. Currently, there are more than 5 million E85-capable FFVs on the road, and Ford, Chrysler and GM plan to sell nearly 1 million more in 2006. Six million FFVs fueled by ethanol would displace 3.6 billion gallons of gasoline per year, according to Ford Motor Co.

To help ramp up FFV production and for the 25x25 goal to be met, the three CEOs said renewable fuels should be available at about 20 percent to 30 percent of the nations approximate 170,000 gas stations. Currently, about 600 gas stations carry E85, and such an increase in E85 pumps would reach 90 percent of the U.S. population, according to Ford Motor Co.

The three CEOs expressed interest in meeting with President George W. Bush in the future to discuss these ideas, according to Max Gates, Chrysler communications manager. Its worthwhile to get [them] together to exchange thoughts on these key issues, Gates told EPM. There was speculation that [the CEOs] were asking for a handout, and thats not what this was. They wanted to address things like our dependence on foreign oil, gas prices and pursuing the alternatives. Renewables can help us.

LaSorda, Ford and Wagoner arrived at Capitol Hill in decorated FFVs. For example, Chrysler sent its Town and Country minivanwith its patented and popular Stow N Go seatingthat had the slogan Stow N Goes on Ethanol on the exterior.

A day earlier, Ford Motor Co.s Vice President for Environmental and Safety Engineering Sue Cischke visited members of Congress to express support for bipartisan legislation that would offer a reimbursement of up to $30,000 to gas station owners who convert their pumps to renewable fuels. Sens. John Thune, R-S.D.; Ken Salazar, D-Colo.; and Jim Talent, R-Mo., have cosponsored the Alternative Energy Refueling Act of 2006 (S. 2614), and a similar measure in currently in the House. By providing the necessary incentives, this innovative measure will help us expand the infrastructure and use of renewable fuels in Americahelping provide relief to Americans at the pump and lessening our dependence on foreign oil, Cischke said.

socala4 · June 2006

I am not debating that and its not germane to this conversation.

It is still a fact that E85 is more expensive to use and as long as it remains so it will have limited success.

The political aspect is not only germane, it is key to the entire issue.

This is not simply a matter of comparing resources and comparing pump prices, but whether we all want to pay the costs, financial and otherwise, of a petroleum-based foreign policy.

If the issue was simply a matter of comparing the cost of unsubsidized oil and unsubsidized ethanol, then you would be strictly correct. At today's prices, gasoline is cheaper than ethanol, and that would be it.

But that isn't the sole issue -- we are paying $275 million per day just to pay for one war alone that was driven largely by the strategic location and resource base of one country in the Middle East. We also funnel foreign aid money to other countries elsewhere in the region, the Caspian, etc. as well as maintaining a military presence, all because oil makes these areas strategically important.
But again, this is paid for by the general fund, so you don't see it in the pump price. Perhaps it should be passed on directly to drivers in the form of gas prices and to industry in the form of a resource tax, so that we all begin to see that oil costs us a good deal more than just $70 per barrel.

seniorjose · June 2006

E85 is a usable fuel that is made from a blend of 85% ethanol and 15% unleaded gasoline. E85 is designed for use in flexible fuel vehicles, or vehicles with an engine designed to run on any blend of ethanol up to 85%. As of 2006, the U.S. Department of Energy classifies e85 as an alternative fuel.

There are many benefits to e85, including the primary source of ethanol used in the blend. Corn is the most common source, which makes e85 a renewable resource. In addition, e85 is a high-performance, clean burning and environmentally friendly fuel.

Though e85 is not as common as unleaded gasoline, it is becoming more widely used, especially in the Midwest where corn crops are plentiful. Many major motor vehicle manufacturers, including Daimler Chrysler, Ford, General Motors, Isuzu, and Nissan, have been manufacturing flexible fuel vehicles since as early as 1999 and the number has been increasing each year. The potential for decreased dependency on crude oil is one reason the use of e85 is being closely watched. It is not difficult for retail gasoline stations to convert to e85 and there are an increasing number of stations that offer the fuel. Though gas mileage is reduced by 10 to 15% with the use of e85, the price of e85 has traditionally been lower than unleaded gasoline, by as much as US$0.80 per gallon (about 3.8 liters) thus far.

The biggest hurdle the industry faces is increased awareness and availability. Though flexible fuel is an option that can be ordered with a new vehicle at little or no extra cost, many people are not aware that their newer vehicles are e85 compatible. Check your vehicle owner's manual to see if you have a flexible fuel vehicle. If your manual does not state you can use e85, it is not compatible. If you are in the market for a new vehicle, the flexible fuel option may prove a sensible choice if available.

socala4 · June 2006

E85, E95, E10 and Biodiesel are a solution from Americans, by Americans using American know-how to solve the foreign oil cartel's extortion policies as it relates to America --NOW!

That's also not accurate. Ethanol production is currently not sufficient to serve needs today, and most cars do not run on E85.

Any solution that is centered around the use of alternative fuels, whether E85, biodiesel, etc., is going to take several years to implement. What can be done in the short term will differ from what could be done during the medium- and long-term.

seniorjose · June 2006

Stations Offering E85 Surge to 710 Study shows Gas Stations offering E85 nearly double from 2005.
Minneapolis (PRWEB) May 25, 2006 -- The latest count by http://e85vehicles.com/e85-stations.htm shows that 710 Gas Sations in the US are now offering the ethanol based alternative fuel E85.

This study gives clear indication that the ethanol based fuel E85 is becoming a true alternative to gasoline for many Americans.

Those 710 Stations offering E85 are up from less than 200 E85 Stations in 2004 and 397 in 2005.

The greatest growth continues to come in the Midwest, Indiana for example went from zero E85 pumps in 2004 to 30 so far in 2006 and they are expected to add another 20 E85 pumps before years end.

While Minnesota with 189 stations offering E85 continues to lead the nation in e85 use, Illinois has already doubled the number of stations from 63 in 2004 to nearly 120

5 States with the most E85 Stations are:

. Minnesota - 189
. Illinois - 120
. Iowa - 55
. Nebraska - 38
.South Dakota - 32

Those E85 stations are going to be in heavy demand as the Automakers are adding a record number of Flex Fuel vehicles this coming year. GM produces 14 Flex Fuel models and plans are for 5 more flex fuel models for 2007 totaling 400,000 new E85 capable vehicles in one year.

Ford is adding the ever popular F-150 pickup to it's offering of 5 flex fuel vehicle models in 2007.

Stations wanting to add a pump for E85 can apply for State and Federal grants up to 30K to help cover the installation of a new pump for E85 or for the conversion of an existing pump.

A complete listing of E85 Stations can be found at http://e85vehicles.com/e85-stations.htm.

seniorjose · June 2006

If you have or are buying an FFV vehicle NOW, you can pump E85 into it provided you are in the Middle West at one of the 701 E85 stations. It can't roll our overnight, but the effort by all people associated with Ethanol is very high. As a priority for the United States as defined by our president, it will be coming even faster. SoCal -- will not get it as fast as the Middle West.

snakeweasel · June 2006

Even if you live in MN where E85 is taxed at a lower rate than unleaded regular. It will cost you about $4 more to drive 100 miles on E85 than on regular. Or about $50 a month more to be corny.

Not only that but if you don't have a station along your regular route that carries the stuff you have the added expense of the fuel burned going out of your way to buy it. Not to mention the extra time you spend with more frequent fill ups and the time spent going to an out of the way gas station. I figured that in my daily driving going the extra distance to get E85 (about 3 miles) would cost me almost $60 and 20 hours of my time, and that above and beyond the extra cost per mile I am using.

seniorjose · June 2006

Careful...your arguements are getting thinner. FFV vehicles means you do NOT have to use E85 ...ever, if you don't want to. But to kick the oil cartel in the pants, I certainly would like to do it! Sorry that your 3 mile too far jaunt will keep you in the clutches of Fidel and the boys!...cheers!

socala4 · June 2006

If you have or are buying an FFV vehicle NOW, you can pump E85 into it provided you are in the Middle West at one of the 701 E85 stations.

I'm not going to buy a FFV vehicle NOW, because at this stage of the game, I don't buy domestic cars, plus my car is too new for me to trade it in to buy a fuel that isn't available in my area. Where most of us live NOW, there is no E85 to buy.

Your own article makes the point clear -- there is very little distribution of E85 as of today. It may be a solution in several years' time, but it is not a solution NOW as you continue to state.

snakeweasel · June 2006

The political aspect is not only germane, it is key to the entire issue.

Since I wasn't talking about the political aspect it is not germane to the conversation. You do have a habit of taking threads off the topic and I am not going down that road. We are not talking politics but mircoeconomics, please keep on that subject.

This is not simply a matter of comparing resources and comparing pump prices, but whether we all want to pay the costs, financial and otherwise, of a petroleum-based foreign policy.

Unfortunately it does come down to comparing pump prices see my post here (number 635 on this forum). Generally when people stop at the gas station they are not thinking geo-politics when they choose what gas they buy, they are far more incline to think their pocket books.

But that isn't the sole issue

It is when Joe Sixpack is looking at pump prices. To say otherwise means that you are either 1.) not getting my point or 2.) ignoring it.

snakeweasel · June 2006

Careful...your arguements are getting thinner. FFV vehicles means you do NOT have to use E85 ...

Nope actually the fact that I don't have to use E85 makes my case stronger. Why use a fuel that gives me fewer miles for my dollar that I have to search for? Just use regular gas, its cheaper and easier to get.

Sorry that your 3 mile too far jaunt will keep you in the clutches of Fidel and the boys!...cheers!

The alternative would be to be in the clutches of ADM?

socala4 · June 2006

We are not talking politics but mircoeconomics, please keep on that subject.

Then to clarify, **I** am talking about the political aspects, because IMO, that should be the main determinant of fuel policies going forward. Using today's pump prices as the sole measure of what needs to be done tomorrow is short-sighted and will continue to drain the US treasury of significant resources.

The reason that oil is as costly as it is today is largely because of the lack of planning and a coherent, long-term energy policy that has made us so utterly dependent upon it. We are potentially on the verge of the return of stagflation because of the importance of oil to the world economy, and this dependency is largely self-inflicted.

The free market alone won't solve this problem. Then again, oil long ago stopped being a free market solution, being that the US has spent billions of dollars on a foreign policy meant to ensure its supply. In effect, the US has already been subsidizing oil, we just haven't seen this at the pump.

As for alternative fuels, assuming available distribution, if taxes for conventional gasoline was increased while the cost of the alternatives were reduced, whether through subsidies, lower taxes, etc., then that price shift would influence consumer behavior. Anything that does not include the continuation of the status quo is going to require policy changes, whatever those happen to be.

gagrice · June 2006

Trying to smear politicians and companies with the broad brush of anti-American hatred

I did not see any posts that claimed anyone was anti-American. I think many politicians are ignorant of the facts about ethanol. Or maybe blinded by huge campaign contributions in an election year. Ethanol has become a political issue. I don't see any reason to think it has anything to do with being anti-American.

As far as the Sierra club they are very pro alternative fuels. They look at the big picture. Not just what it means to one entity. They would like to see ethanol from biomass. Their biggest concern is the wasteful farming practices to get a few extra bushels of corn per acre. What is done on an acre of land in Iowa can have bad environmental effect a thousand miles away. What is good for Iowa or MN is not necessarily good for Mississippi.

gagrice · June 2006

I would say it will never be a factor on either coast. Farm land is too valuable to grow corn. If CA is able to produce enough ethanol for just the mandated 7% I would be surprised. I cannot imagine cutting down an orange grove to plant corn. There are so many crops that pay more per acre that it is just not practical to grow corn here. Except White Diamond ear corn NOW that is corn I will use.

Will ethanol E85 catch on in the US? Will we Live Green and Go Yellow?

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