Ethanol shortage to raise gas prices?

[CompG_Dude]

Good to see that now we are not just dependent on foreign oil, but foreign ethanol as well... If we can't keep up domestic production of ethanol for a few hundred thousand E85 vehicles now, how are we going to produce enough in the future as the market grows?

Ethanol shortage could up gas prices
By James R. Healey, USA TODAY
Thu Mar 30, 6:45 AM ET


Gasoline prices will be unusually high and shortages might occur this summer, because the U.S. ethanol industry can't keep up with the demand for fuel-grade alcohol to mix with gasoline, the head of the U.S. Energy Information Administration told a Senate committee Wednesday.

Merely "short-term challenges," countered Bob Dinneen, president of the Renewable Fuels Association, the ethanol trade group. Whatever can't be produced here can be imported, he said.

But imported ethanol, mostly from Brazil, carries a 54-cents-per-gallon tariff that would boost fuel prices even more, unless it were waived.
Ethanol - grain alcohol made mainly from corn in the USA - is being promoted by the auto and ethanol industries and the government as a substitute for gasoline, usually in a mix called E85 that is 85% ethanol and 15% gasoline.

But the comments Wednesday at the Senate Environment and Public Works Committee underlined how distant a goal that is. The hearing wasn't even about a goal as ambitious as E85. It was to discuss ethanol as a substitute for MTBE, a clean-air additive in gasoline. Replacing it with ethanol would require only about 8% as much ethanol as E85 requires.

Whole story at: http://news.yahoo.com/s/usatoday/200...uldupgasprices

[pkd87]

I could definitely see a shortage this summer. GM has been toughting E85 since the superbowl, I think it has gotten alot of people to consider buying a vehicle with E85 or if one has E85 vehicle to start filling it up with E85. But like the article said, 33 plants are under construction and seems like at least 20 of those are going to open by the end of the year. Hopefully with new technologies they can produce more ethanol using the same amount of corn or find other products to use or find more efficient methods of producing it, so the demand increases so does the supply.

[camaro_freak]

GM was too early to advertise this option. The infrastructure just isn't available yet to most communities.

[VGT]

I don't blame GM too much. With all the pressure from those Hollywood-tree-hugging-retard-loonies out there, they felt the pressure and rushed it.

[Ming]

Originally Posted by camaro_freak

GM was too early to advertise this option. The infrastructure just isn't available yet to most communities.

Imagine the reaction in "2010" when GM rolls out its Hydrogen vehicle(s) - one that I expect will not be "flex fuel" (able to run on just gasoline) - at least not if they are of the "skateboard" design. No infrastructure, and no flexibility = dead in the water, or at the very best, limited, as was the EV-1.

[SuperSS27]

Well, what percentage of vehicles on the road are able to use E85? MAYBE 5% of the total cars. But its prolly a lot lower than that. GM did good by Advertising E85 capabilities because they will be the first to advertise it and mass produce it into their vehicles. People will want to buy them in preperation for the E85 infrastructure.

[lab1]

I thought this was related to new regs requiring a high percent of ethanol in all gasoline instead of MTBE and no way related to GM and e85 marketing. E85 and Ford FlexFuel automobiles have been on the market for years and stations are limited...

[CHRISGTO04]

Originally Posted by camaro_freak

GM was too early to advertise this option. The infrastructure just isn't available yet to most communities.

I agree, but I think it was GM's way of bragging before the Japanese could get credit for it.

[Steel4ring]

The problem is not E-85. That really is a separate issue. The immediate problem is the summer gas blend. Since MTBE is not an option, all refineries are going to have to use an ethanol blend. That takes time and money to switch over. I predict that we may see the federal government suspend the blending rules if gas gets over $3.00 this summer, as they suspended the rules last year after Katrina.

These clean air blends are really hard to make and are costly.

[Havasavana]

Originally Posted by CompG_Dude

Merely "short-term challenges," countered Bob Dinneen, president of the Renewable Fuels Association, the ethanol trade group. Whatever can't be produced here can be imported, he said.

But imported ethanol, mostly from Brazil, carries a 54-cents-per-gallon tariff that would boost fuel prices even more, unless it were waived.

So what's the problem? High gas prices now have nothing to do with any 'shortage' of ethanol, and everything to do with oil companies testing the market to see how much people are willing to pay. This is expected in a market economy, but of course they don't want to admit it since people like to pretend the oil companies should settle for less than they can get. Presumably the tariffs on imported ethanol exist to benefit the domestic producers and protect them from price competition. But, if they can sell all they can produce, they wouldn't be harmed by imports, and the tariffs could be reinstated as their production capacity increases. A few days ago I read the high gas prices were caused by refineries being down for cleaning and conversion to summer blends. Apparently inventories fell last week and are now at normal levels.

[racy]

Originally Posted by CompG_Dude

Good to see that now we are not just dependent on foreign oil, but foreign ethanol as well... If we can't keep up domestic production of ethanol for a few hundred thousand E85 vehicles now, how are we going to produce enough in the future as the market grows?

Ethanol shortage could up gas prices
By James R. Healey, USA TODAY
Thu Mar 30, 6:45 AM ET


Gasoline prices will be unusually high and shortages might occur this summer, because the U.S. ethanol industry can't keep up with the demand for fuel-grade alcohol to mix with gasoline, the head of the U.S. Energy Information Administration told a Senate committee Wednesday.

Merely "short-term challenges," countered Bob Dinneen, president of the Renewable Fuels Association, the ethanol trade group. Whatever can't be produced here can be imported, he said.

But imported ethanol, mostly from Brazil, carries a 54-cents-per-gallon tariff that would boost fuel prices even more, unless it were waived.
Ethanol - grain alcohol made mainly from corn in the USA - is being promoted by the auto and ethanol industries and the government as a substitute for gasoline, usually in a mix called E85 that is 85% ethanol and 15% gasoline.

But the comments Wednesday at the Senate Environment and Public Works Committee underlined how distant a goal that is. The hearing wasn't even about a goal as ambitious as E85. It was to discuss ethanol as a substitute for MTBE, a clean-air additive in gasoline. Replacing it with ethanol would require only about 8% as much ethanol as E85 requires.

Whole story at: http://news.yahoo.com/s/usatoday/200...uldupgasprices

Just to be fair to the ethanol market, I have to bring some clarity to this article and reiterate a sentence that wasn't emphasized in the article.

The ethanol shortage will be short-term. There are new ethanol plants coming online and being built once a week. Our productive capacity growth will more resemble an exponential curve than a flat linear curve.

[AmericanRevv]

So, the current problem is ethonal fermenting plants (or stuff like that)? Is there a chance that the corn and other organic material may run low with this big E85 push? I'm all for E85, but that tariff doesn't attract me.

[WishIhadatruck]

Originally Posted by Ming

Imagine the reaction in "2010" when GM rolls out its Hydrogen vehicle(s) - one that I expect will not be "flex fuel" (able to run on just gasoline) - at least not if they are of the "skateboard" design. No infrastructure, and no flexibility = dead in the water, or at the very best, limited, as was the EV-1.

2002
April: Demonstrated Chevrolet S-10 Gasoline-Fed Fuel Cell Vehicle, the world's first drivable fuel cell vehicle that extracts hydrogen from gasoline to produce electricity.
http://www.gm.com/company/gmability/...ilestones.html

One possible transition method to hydrogen.

[johnny smallblock]

Originally Posted by WishIhadatruck

2002
April: Demonstrated Chevrolet S-10 Gasoline-Fed Fuel Cell Vehicle, the world's first drivable fuel cell vehicle that extracts hydrogen from gasoline to produce electricity.

This would a great bridge between oil and hydrogen. And if people could fill up at their regular station, hey would feel comfortable with the technology.

Originally Posted by CompG_Dude

If we can't keep up domestic production of ethanol for a few hundred thousand E85 vehicles now, how are we going to produce enough in the future as the market grows?

Yes, because production capacity isn't going to change at all. The market will see a swell in demand and sit idly by doing nothing.

[fuhrwb]

Originally Posted by Steel4ring

The problem is not E-85. That really is a separate issue. The immediate problem is the summer gas blend. Since MTBE is not an option, all refineries are going to have to use an ethanol blend. That takes time and money to switch over. I predict that we may see the federal government suspend the blending rules if gas gets over $3.00 this summer, as they suspended the rules last year after Katrina.

Sounds more like the government pushed a too hard too soon with bringing out E85...these are the kind of problems that should have been thought out well before selling it to the public.

Originally Posted by Steel4ring

These clean air blends are really hard to make and are costly.

With the type of profits that these companies are making...it shouldn't make too much of a dent in their pocket books.