NEVC: OPEC to Keep Oil Prices Low to Discourage E-85 Use & Energy Independence

[Ming]

OPEC to Keep Oil Prices Low to Discourage Alternative Fuel Use
October 23, 2006
Michelle Kautz
http://www.e85fuel.com/e85101/flexfuelvehicles.php



Jefferson City , MO – OPEC announced late last week that they were planning on cutting oil production by 1.2 million barrels per day in hopes to keep costs of crude at about $60 per barrel. This cut is intended to bring the cost of gasoline up a bit but to keep it low enough so as to be more attractive than alternative fuel pricing.

“It’s unfortunate that OPEC feels that they can control the vision of this country and the destiny relative to alternative fuels,” exclaimed Curtis Donaldson, Chairman of the National Ethanol Vehicle Coalition.

OPEC expects to keep the price of gasoline at about $2.25 per gallon. According to a Foxnews.com news story on October 20, “OPEC's cut also signaled that it would defend a price of about $60 a barrel, high enough to justify its investment in future production capacity but low enough to allow economic growth and deter a flood of alternative fuels.”

“OPEC feels that they can manage the price of gasoline to a point where increasing the production of E85 and providing it at more locations across the country will become less attractive."

Source: http://www.e85fuel.com/news/102306_opec_release.htm

Related Fox News Story Link: http://www.foxnews.com/story/0,2933,222840,00.html

[vw1610]

It saddens me to hear how twisted and controlling they are.

[DuSpinnst]

Well I see it as WIN WIN for automakers rolling out FlexFuel vehicles. By the time the infrastructure for FlexFuel is in place OPEC will raise prices.

[sagethemonkeyboy]

This is why we need fuel to come from our own country so were not being held hostage by these ppl

[mjd1001]

I don't buy into this story that much. First, the reserves in those countries are not infinite. They have a certain ammount of Oil and eventually that will get used up before the world goes to 100% energy independence (I'm not sayin the world will run out of oil, Other oil fields will be discovered but there is no guarantee they will be in Opec countries.) Secondly, E-85 is now primarily used as an automotobile fuel. Oil has so many other uses...lubricants...plastics...different types of fuel...that other than the day to day changes in price caused by people's perception...it doesn't make a whole of of sense for OPEC to fear Ethanol taking over from Oil.

[member12]

Probably too late to prevent investment in refining capacity....but I welcome the lower fuel prices reguardless.

[SuperSS27]

It may slow down the E85 movement, but E85 is the future.

[jbartley]

whatever, OPEC is full of shiz. $60/barrel is not the new "norm", that's inflated by about $30.

full steam ahead on hydrogen and flex fuels. then everybody wins...

[Sgt Beavis]

a few points.

1. There is no way OPEC members are going to obey that 4% cut when they are making money hand over fist from stupid speculators that are paying over $55 a barrel then losing their shirts on the spot market.

2. Even if OPEC members obey the cut, their market is still in a state of Contango and will be for some time. Oil is very over priced right now and it is just a matter of time before a major hedge fund pulls out of the oil market and sends prices tumbling.

3. E85 from corn is just plain stupid. E85 from sugar cane makes a little more sense but even the Brazilians can barely make it work and Brazil has a VASTLY SMALLER energy market than the US has. E85 will never be viable as a major fuel source in the US.

[stevecmh]

They think they are so smart. hoepfully it dosnt work. just goes to prove they know how to make money

[Stéphane Dumas]

Originally Posted by Sgt Beavis

a few points.

3. E85 from corn is just plain stupid. E85 from sugar cane makes a little more sense but even the Brazilians can barely make it work and Brazil has a VASTLY SMALLER energy market than the US has. E85 will never be viable as a major fuel source in the US.

Never said never, in France, they plans to use sugar beets who have the advantage to be cultivated in less warmer areas and an acre of sugar beets fields made more ethanol then an acre of corn field. Sweden use forest waste to made E85 fuel. Then the ethanol coming from switchgrass who can be a more promising source for E85

[jbernie]

Regardless of what OPEC wants to charge, there are still factors here inthe US that can jack the price up real quick, last years hurricanes hitting the refineries was proof of that.

As companies are investing in production/supply of E-85, and companies like GM are providing decent number of vehicles that can use the fuel the change is in motion.

I definately agree that e-85 is not the be all end all to fix issues, but each step made away from OPEC reliance is a positive step in the health of the US economy. If the US can produce a large amount of its fuel requirements without OPEC the economy is definately the better for it.

[Kennyboy]

There was an article in Consumer Reports that E-85 is just a myth. That E-85 can't solve all our problems and the notion that it will help reduce our independence on foreign is all bunk. It go on to say that it will create a shortage of useable food supply and rise up the cost of corn, sugar, or sugar beets.

[dreadnaught1181]

Originally Posted by Sgt Beavis

3. E85 from corn is just plain stupid. E85 from sugar cane makes a little more sense but even the Brazilians can barely make it work and Brazil has a VASTLY SMALLER energy market than the US has. E85 will never be viable as a major fuel source in the US.

The reason the Brazilians use sugar cane is because it is so abundant. We would be better off using switchgrass for cellulosic ethanol production because:

a) it can be found naturally across much of the midwest
b) requires far less irrigation that corn of sugar cane
c) can be harvested 2 a year in some areas due to its rapid growth
d) it has a far higher unit of energy per acre output than even sugar
*(for every 1 unit put in to collecting it you'd get 12 back, compared to 8 for sugar and 4 for corn)

*from an episode of Modern Marvels on History Channel

[Ramair-WS6]

Originally Posted by Sgt Beavis

3. E85 from corn is just plain stupid. E85 from sugar cane makes a little more sense but even the Brazilians can barely make it work and Brazil has a VASTLY SMALLER energy market than the US has. E85 will never be viable as a major fuel source in the US.

Anyone that is seriously looking at ethanol production is looking way beyond just using corn. Cellulostic ethanol production will be the largest producer of ethanol and that will probably be followed closely by switchgrass and then by local waste companies. I see ethanol realistically being 30-35% of our automobile fuel needs.