E85 Boondoggle of the Day: "Ethanol Boom Will Help Lower Gasoline Prices"

e85 boondoggle of the day ethanol boom will help lower gasoline prices

Timothy Gardner and Rebekah Kebede of Reuters [via the Calgary Herald ] claim that an increase in America's output of cheap, subsidized ethanol, along with additional gasoline refining capacity coming online, may lower U.S. gas prices. According to the U.S. Department of Energy, American production will rise by 130k barrels of ethanol per day in 2008 (up to 550,000). Gardner and Kebede note that the government subsidizes blenders to the tune of $0.51/barrel of blended ethanol, and that "the subsidies have made ethanol cheaper than gasoline and a much sought after component for blending into motor fuel." Another factor that could contribute to falling prices: the slowing of American demand for gasoline. While demand grew by 1.3 percent annually from 1971 to 2007, growth has slowed down 0.7 percent in 2007 and the government forecasts a paltry 0.4 percent for 2008. And what of transportation costs and logistics? (Ethanol can't be transported via existing pipes; it must be transported by diesel burning tanker trucks.) Or consumer reluctance to use corn juice once they figure out the (often hidden) fact that 85 delivers significantly less bang-for-the-buck? Nothing.

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  • Jonathon Jonathon on Mar 27, 2008

    Isn't "cheap, subsidized" anything kind of an oxymoron? We pay for it one way or another.

  • Engineer Engineer on Mar 27, 2008

    kph, We should only replace gasoline when we find an alternative that is cheaper or significantly better and preferably both. Ethanol is not that alternative, especially when you factor in that with its lower energy content ethanol needs to be less than 2/3rds the cost of gasoline to be cheaper per unit of energy. E85 needs to be less than 75% of gasoline. AFAIK, this has not happened anywhere, yet, in spite of generous subsidies (your tax dollars at work enriching rich political lobbyists). Why do our elected muppets keep believing this will change in future? You are perhaps right about the processes I referenced. But their are others such as Choren and Range Fuels. I know Range Fuels tend to confuse people by playing the cellulosic ethanol card, but really they are about gasification of *whatever* and producing mixed alcohols which in reality means less ethanol (and more butanol) is better. And ethanol production by fermentation is by no means efficient. It takes a lot of heat energy to distill the ethanol out of the dilute fermentation broth. Thermochemical production beats fermentation hands down.

  • Kph Kph on Mar 28, 2008

    Yes, I mentioned gasification in my first post, it looks like we agree that this is better than fermentation. And butanol may also be better in that it tends to cause less corrosion. I think my fear is that people dismiss biofuels altogether when there are ways to generate fuel from waste, and even plastic. I'm somewhat of two minds when it comes to using biomass for feedstock, though. Seems like energy from the sun is better harvested directly, rather than used to grow something just to be burned or converted to fuel. One more thing, just to complicate matters a bit more... ethanol may have less energy content than gasoline, but it tends to burn more thoroughly. So E85 has about 25% less (energy / gallon), but typically you lose only about 20% (miles/gallon). Ultimately that leads to a higher (miles / input energy) for ethanol than gasoline. Which suggests that if you were to synthesize a fuel, there should be plenty out there that are better than gasoline. I don't think I know enough about all the different fuels to suggest what that should be, though.

  • Engineer Engineer on Mar 29, 2008

    kph, Yes, gasification shows a lot of promise. The obvious starting point would be gasification of wastes: clean up the environment and get a feedstock at less than $0/ton, i.e. people will pay you to take their wastes of their hands. Not enough wastes to completely replace our oil use, but as good a starting place as any. Something like 80% of landfill waste is organic, i.e. prime fuel feedstock. On biomass: it may not be the most efficient solar collector, but it is self-replicating, which is helpful. Ultimately, the most efficient fuel crop would be algae, grown in the ocean, where there is enough area to make a difference. Sure, there may be better fuels than gasoline (or diesel) out there, but ethanol is not the one. A better fuel, also needs to be cheaper (or at least not more expensive) i.t.o. $/mile travelled.

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