Ethanol ready 2 go head 2 head against gasoline in the marketplace
Ethanol industry changing its strategy
Saturday, July 10, 2010 6:53 AM
(Source: The Wichita Eagle (Wichita, Kan.))By Dan Voorhis, The Wichita Eagle, Kan.
July 10--Ethanol makers say they are ready to go head to head against gasoline in the marketplace -- without federal tax subsidies.
But, while they can sell the fuel for less than gasoline, demand is limited in part because the public can't buy it directly.
That's why trade group Growth Energy and two Wichita-area companies, ICM and Poet Ethanol Products, said now is the time to launch the industry's next phase.
On Friday, they said they will be among those asking the federal government to switch its subsidies to new groups to continue building the industry.
Currently, the federal government provides a 45-cent-per-gallon tax credit to refineries to blend ethanol into their gasoline. The Environmental Protection Agency allows refiners to use up to 10 percent ethanol, called E10, in gasoline blends.
"Our problem is that our customers are our competitors," said David Vander Griend, CEO of ICM.
To increase demand, Growth Energy wants to provide incentives to car companies to build more cars that can burn higher blends and to gas station owners to install special pumps that dispense higher blends of ethanol. That way the public, rather than refiners, could decide whether to buy ethanol or gasoline, they say.
Robert Casper, president of Poet Ethanol Products, said ethanol in bulk sells for nearly 50 cents a gallon less than gasoline, without any federal tax credits.
"Let the marketplace choose," Casper said.
The ethanol industry, he said, could replace all oil imported from OPEC.
Federal environmental regulations are another barrier to industry growth.
The industry is currently pushing the EPA to raise its cap on ethanol in gasoline to 15 percent. After several delays to study the issue, the agency has said it will announce its decision in September.
The industry grew rapidly up to the size needed to supply E10 and then hit a wall because of the cap.
Nationwide, production of ethanol reached more than 10 billion gallons in 2009, up from 6.5 billion gallons in 2007.
But ethanol made from corn has been criticized by environmental group who say corn production hurts the environment, while those in the oil industry complain about the subsidies for competitors.
I noticed your framed the question again to pit the fuels efficiency against each other. The larger issues is how long we can afford to shuttle large numbers of troops,equipment etc back and forth guarding the mideast oil flow and a equally large amount clearing shipping lanes. The defense dept cannot even build the ships they REALLY want (like the design that jatrudel stated was being started in Maine) because of the heavy expenditures on other things. That hardly the defense we want for our nation. We want, at least I do,the BEST designs our military can come up with. Ethanol is not the only answer to be sure. Natural gas could easily be incorperated in the transport of goods via heavy truck. Ethanol with the newer technology can be one of the solutions, and it keeps U.S. dollars circulating in the U.S. That another issue that can't be ignored. Ethanol provides economic strength. Importing oil doesn't. Its as simple as that, one is a asset to our overall strength, the other a drain on it. No matter how marginal the gains, if it helps,its good.
Good morning AH. I know the gas you probably run in it. It has to have a oxygenate to raise octane in it. That oxygenate will eventually make it into your ground water supply. It can give you cancer. The lower cost of Ethanol offsets the milage difference when I was using it. Thats not always the case depending on the cost of a bushel of corn, but it was a advantage when I was up there. The reasons my 351cid engine is so dependable could be from multiple causes including the beefy main bearing area that is larger than nearly any other gas motor, a additive called prolong, mobile 1,Ethanol,etc One things certain old timers took apart engines that were full of sludge, oxygenates like Ethanol keep your top end cleaner.
So Midev...care to share what your average MPG was on that F250 running on E85.
My guess is that you struggled to exceed 10MPG...close?
My Jeep GC 4.7V8 gets an average of 18.3 on pure gasoline...17.2 on 10% ethanol blend. Been collecting data since it was new....now 120,000 miles on her. Engine burns zero oil on 15k Mobil 1 oil changes.
Just the facts.....
With all due respect...ethanol can not go head to head with gasoline...it only has 1/2 the btu energy value/gal...I guess if you are ok with 10 miles per gallon/ethanol then it can go head to head....but to say it is an economical push is a fantasy....and part of the new math bs that is taking over our society...
Oil industry ramps up opposition to repealing tax breaks
By Ben Geman - 07/02/10 04:42 PM ET
A powerful oil industry trade group is launching a broad new ad campaign to prevent legislation that ends billions of dollars worth of tax breaks from gaining political traction.
The American Petroleum Institute will run television ads in 10 states – including several swing states – beginning July 6 that allege the plans would harm the economy and cost jobs.
President Barack Obama and several Democrats have floated plans to end various incentives, such as write-offs for drilling costs and the industry’s ability to claim a lucrative manufacturing tax break.
But the ads will make the case against the measures by showing “'working Americans’ responses to the potential for new taxes on the oil and natural gas industry,” API said Friday. They will run in Colorado, Michigan, North Carolina, North Dakota, Pennsylvania, Virginia, Maine, Missouri, Ohio and West Virginia.
“Americans have historically been suspicious of taxes on the industry that produces most of the energy they consume. They deserve to be informed about new proposals that would increase those taxes by many billions of dollars a year,” said API President Jack Gerard in a prepared statement.
A spokesman for the group did not provide the cost of the ad buy.
The ads come amid a flurry of House and Senate proposals aimed squarely at incentives enjoyed by the industry, which is on the defensive in the wake of the Gulf of Mexico oil spill.
Democrats are planning energy bills and measures that respond to the spill that could be vehicles for plans that roll back industry incentives.
Rep. Earl Blumenauer (D-Ore.) this week floated legislation to end tax breaks that his office said are currently projected to cost the government $30 billion in lost revenue over five years.
“By continuing to artificially subsidize fossil fuels, we undermine investments that will guarantee our energy dependence. It is time for our country to shift gears, end the billion dollar carve-outs for the largest oil companies, and start investing our limited taxpayer dollars in America’s future rather than America’s past,” states a letter to colleagues that Blumenauer circulated Thursday.
He is a member of the Ways and Means Committee that crafts tax policy.
The industry prevailed in one battle over its tax incentives earlier this month. On June 15, the Senate voted 31-65 against Sen. Bernie Sanders’ (I-Vt.) plan to repeal over $30 billion worth of tax breaks and steer the money into energy efficiency programs and deficit reduction.
Same link as previously provided within this thread
The last figures I saw had BP about fourth behind VLO in ethanol subsidies making about .45 cents a gallon to a total of about a half a billion in "blenders credit". A review of farmland looks like a large proportion of the aging current owners will sell or pass on farms in the next fifteen years and a equally large proportion of land (up to 75% in Iowa) is paid off,with no debt owed against it. With farmland prices at new lows (taking the same hit as housing from the housing and land bubble bursting) it might be a good investment for the future.
I also saw a report that Spain had recently taken large delivery of distillers grain exported from the U.S. A byproduct of Ethanol production that was previously discarded. Its nice to know we still have products that other countries want to import.