Subsidies can be used to get something going; however, I think in this case they should be phased out.

No, I think it is far question. As a matter of fact, if we were to deplete all corn before the next harvest, prices would start to go up significantly when supplies get below a certain point. So I think it is normal to have at least several weeks worth of supply at the end. Of course, growers would all like to have their piles completely depleted, but that's not the case in the consumer side.

As for ethanolrfa.org -- it is probably not exactly an unbiased source of information. I find some of their "facts" are very questionable, to say the least.

 

I agree.

I can tell you with certanty that the best option (cheapest, most efficient0 would become widely used.

It is my belief that option would not be ethanol. Wouldn't even be a close second.

 

I dont think you'll find one fact concerning ethanol, aside from it's molecular composition, that wouldn't be disputed by someone. The whole issue is simply too charged.

 

Yup.


Makes a good industrial solvent too.

 

And it's good for drinking, too, in spite of being somewhat (?!) poisonous

In any case, I think we can agree on a lot more than composition, and there's only a handful of really contentious issues, one of them being the true cost to produce it.

There are many ways to do, and not do scientific research and it's not that hard to 'bend' the facts to support your agenda.

Here's a funny, though somewhat off-topic excerpt from an MSNBC article:

 

Equally, there's a whole oil industry out there against ethanol. Two industries against each other, no wonder it's so highly charged!

I'm sure that absolutely no honest law-abiding oil company would ever stoop to skewing a study in their favor, or spreading Fear, Uncertainty, and Doubt about ethanol. Nope. Never happen. Just all those greedy farmers skewing their results.

 

Hold on. Look at it from another view.

1. Are there ANY laws that would keep Exxon-Mobile or BP from setting up an ethanol plant?

2. Where is ethanol going to be sold? Ethanol only stations? Or can you get your E-85 from a pump next to a gasoline pump?

3. Why wouldn't the petrol companies like it? They're making 9% profit right? So you mix in or sell something that costs more for the same profit and you make more $$$. 9% profit on $1.00 is 9 cents. Same profit on $2.00 is 18 cents. And most of the time ethanol costs more per gallon than gasoline. That's inverted right now because of the recent price spike.

4. We're demanding that the petrol companies dillute their product with an inferior product that is going to cause us to have to buy more of same product. Same profit per gallon, sell more gallons = more $$$$$$$$$$$$ to those evil petrol companies everyone hates so much.

5. The gov't is giving subsidies to reduce the cost of ethanol and E-85 at the pump. Who's getting those tax $$$$$$? Could it be those same petrol companies??

I find it all quite hilarious.

 

1. Why on earth would they want to? It would eat into their cash cow, and create more public interest in ethanol, which is exactly what the oil companies dont want. Namely, because they dont directly control it.

2. Station down the road is the East Central Iowa Co-op. I challenge you to find E85, for a fair price, at a BP pump.

3. Like I said before, the oil companies dont directly control production. This drives 'em nuts, that they have to pay for something that they have to put into their gas. Do you think they like it? Heck no!

4. You said inferior. It is actually a much superior fuel when used appropriately. Current FFV's are a model of inefficiency when it comes to running E85. Not exactly more $ to the oil companies, since they have to pay for the ethanol.

5. No. The ethanol producers last I heard.

 

I only have one thing to say. I live out in MN where ethanol is big. It sucks for gas mileage. I have been to one gas station out here that has gas with no ethanol in it and i get 3+ mpg better with it. I drive a 1995 bronco that noramlly gets 10mpg with ethanol gas. When I put the non-ethanol gas in ym tank i get 12-13 mpg and alot more power. Ethanol gas is also a waste of resources. it sucks!

 

Stopped at a few gas stations on I-35 to S. Texas, there are E-85 pumps at a few, ussually in the last island 1 e85 pump by itself but have seen them next to the regular gas pumps too. Pump handles are green just like diesel handles at some other stations, so diesel trucks are pulling up to the E-85 pump all the time and (ussually) realizing the mistake and have to go to the other end of station for the diesel pump.

I agree that ethanol use reduces foriegn oil dependance 0%, cannot be shipped in pipelines, and is used by politicians as just another way to make them look good while shoving a crappy idea down everyone else's throat.

 

1 & 3. Two words... Corporate Farm. How much corn land do you suppose Exxon-Mobile could buy for the cost of ONE offshore oil rig? Why on Earth would they not want to diversify into this market if it's not just a flash in the pan?

2. Looks at post 55.
Never said anything about price. However, my dad was on a trip somewhere in ethanol country. Almost put some E-85 in his tank cause it was the cheapest on the island. He didn't buy it cause he didn't know what it was. Instead he pumped the standard unleaded out of the pump next to the E-85 pump.

 

1. It would be a very difficult market for them to break into. Sure, they could buy the land. But then what? You need seed corn. You need fertilizer. You need farmers to farm it. Etcetera and so on. Plus, there are already some large corporations firmly entrenched in the area. Cargill, ADM, and so on. Farming isn't something you just decide to do on a whim, even if you are an oil company. Sure, they have the money to make it happen. But they probably did a cost benefit analysis, and determined it wasn't worth their time to mess with it at this point. That situation may change however.

2. Notice I said "at a fair price." It has to be priced low enough to make it worth it with the current inefficient FFV's. In most places it's priced based on supply and demand. Being a new fuel, it naturally creates some extra interest, and thus extra demand. Thus, the price becomes higher than it normally would. What happens then is you get a greater percentage of people that dont save money by running it in their FFV's, who come on an internet forum and say it sucks. You can bet the ethanol companies are making money on it though. Ever notice how the E85 price fluctuates directly with the price of gas?

 

You don't list any barriers to entry aside from purchasing assets. I figure the company who posted the largest profit in history last year probably has assets to cover that. Now this statement:

"Sure, they have the money to make it happen. But they probably did a cost benefit analysis, and determined it wasn't worth their time to mess with it at this point. That situation may change however. "

Is right on the money. And since I'm sure the petrol companies are not interested in becoming as extinct as the source of their product, I'd bet that they'll be right in that market if it becomes worthwhile. That would be your bellweather as to if ethanol is going to become a legitimate strategy to supply our energy needs.

 

I dont think you can draw that conclusion. All it means, is that at present, the oil companies get a greater return on investment by building oil rigs instead of ethanol plants. It does not mean that ethanol has no future, is inefficient, is not worthwhile, or anything like that. All it is, is how a business chooses to distribute it's cash. Investing money in either place would likely make them money, it's just investing it in new oil infrastructure will likely make them slightly more money than ethanol at this point in time. Especially when you consider the current price gouging.

They might also be taking the "wait and see" method. Big business generally does not take large risks or change on a whim.

 

Here's a couple of links:
http://www2.dupont.com/Biofuels/en_US/
http://energy.seekingalpha.com/article/14617