Oil could drive down ethanol profits, but industry shielded

[Omaha Steve]

THE ASSOCIATED PRESS
Steam blows over fermentation tanks at the Green Plains ethanol plant in Shenandoah, Iowa, on Jan. 6, 2015.

POSTED: SATURDAY, JANUARY 10, 2015 10:00 AM

SHENANDOAH, Iowa (AP) — Roughly 100 grain trucks a day filled with corn continued to flow into the Green Plains ethanol plant in southwest Iowa this week — even as crude oil prices continued to collapse.

Oil prices may have dipped below $50 a barrel for the first time since April 2009, but ethanol plants across the nation continue to operate at a brisk pace in order to satisfy a domestic and export demand that hasn't weakened.

The cheap oil will likely cut into ethanol profits because refiners will want to pay less for the corn-based fuel additive, but the industry is somewhat shielded by a federal biofuel mandate and the need to boost octane in gasoline. Plus, ethanol producers could thrive beyond the current strong demand if exports or gasoline consumption grow more than expected.

Ethanol accounts for about 10 percent of U.S. gasoline, and remains cheaper than anything else refiners could use to deliver the octane varieties drivers expect at the pump such as premium gasoline.

FULL story at link.

Marta and I have been continuously using 10% ethanol since 1977. And now that refiners have dropped the octane to 85, you can'y buy gas without ethanol unless it is blended with premium. That makes it pricey.

[Sopkoviak]

1. Whew, thank god for government ethanol mandates

Whatever would Cargill and ADM do without them?

[Arcadiasix]

2. Exactly, the mandate is America's stealth corn subsidy

[NYC_SKP]

3. Ethanol good for the environment? Well, your mileage may vary.

I've been suspicious of especially corn ethanol since GW Bush came out in support for it. Good if you grow corn, I suppose.

Biofuels Are Bad for Feeding People and Combating Climate Change

By displacing agriculture for food—and causing more land clearing—biofuels are bad for hungry people and the environment

February 7, 2008 |By David Biello

Converting corn to ethanol in Iowa not only leads to clearing more of the Amazonian rainforest, researchers report in a pair of new studies in Science, but also would do little to slow global warming—and often make it worse.

"Prior analyses made an accounting error," says one study's lead author, Tim Searchinger, an agricultural expert at Princeton University. "There is a huge imbalance between the carbon lost by plowing up a hectare [2.47 acres] of forest or grassland from the benefit you get from biofuels."

Growing plants store carbon in their roots, shoots and leaves. As a result, the world's plants and the soil in which they grow contain nearly three times as much carbon as the entire atmosphere. "I know when I look at a tree that half the dry weight of it is carbon," says ecologist David Tilman of the University of Minnesota, coauthor of the other study which examined the "carbon debt" embedded in any biofuel. "That's going to end up as carbon dioxide in the atmosphere when you cut it down."

By turning crops such as corn, sugarcane and palm oil into biofuels—whether ethanol, biodiesel, or something else—proponents hope to reap the benefits of the carbon soaked up as the plants grow to offset the carbon dioxide (CO2) emitted when the resulting fuel is burned. But whether biofuels emit more or less CO2 than gasoline depends on what the land they were grown on was previously used for, both studies show.

http://www.scientificamerican.com/article/biofuels-bad-for-people-and-climate/

And:

Corn Ethanol Will Not Cut Greenhouse Gas Emissions

California regulators may rule that the biofuel is no better--and might be worse--than petroleum for solving climate change

April 20, 2009 |By Matthew Cimitile

California regulators, trying to assess the true environmental cost of corn ethanol, are poised to declare that the biofuel cannot help the state reduce global warming.

As they see it, corn is no better – and might be worse – than petroleum when total greenhouse gas emissions are considered.

Such a declaration, to be considered later this week by the California Air Resources Board, would be a considerable blow to the corn-ethanol industry in the United States.

If passed, the measure could serve as a model as other states and the federal government tackle carbon emissions. But California's regulators say they have no choice.

http://www.scientificamerican.com/article/ethanol-not-cut-emissions/

The US EPA says that use of ethanol is marginally better for the environment than gasoline, depending upon what source of energy is used to process it and whether it's from domestic feedstock.

Generally, I think it's a wash and I recommend Battery Electric Vehicles or Plug-in Hybrid Electrics over all other types of transport.

More and more are available every season, and the prices will come down.

[Omaha Steve]

4. I do lose a little mileage

In my 4 cylinder echotec Cobalt it is minimal.

Ethanol is a winter antifreeze in my gas tank and lines.

The mash is reused to feed cattle cheap.

And I won't spend the extra $ to buy 50% 85 octane blended with 50% 91 octane premium. This again is dictated by the refiners that ship to the entire State of NE.

OS

[NYC_SKP]

5. Indeed. Energy content per volume is lower for ethanol than for gasoline.

Thus, a drop in fuel economy MPG is expected.





Thanks for driving a reasonably efficient vehicle and regards to Marta!

[Omaha Steve]

6. Cold weather starts drop the mileage too

Year round I average around 28-30 MPG combined. Living in a hilly area doesn't help.

Marta says back at you.