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Pacific Ethanol, Inc. (PEIX) Message Board

  • rick1479 rick1479 Feb 4, 2013 6:29 AM Flag


    So tell me why anyone would buy e85. The companies that make e85 know that you get about 30% less miles per gallon, yet the companies do not lower the price enough to make it equal to buying a gallon of gas. I never buy e85. Bring the price down where it benefits the comsumer and it will be used, plan and simple.

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    • Q&A for E85
      Look up your spelling of SENCE in the Urban dictionary and it will describe you.
      Q. What is E85 ethanol?
      A. Ethanol is a high octane, domestically-produced renewable fuel. E85 ethanol is an alternative fuel to gasoline and is a blend of 85% ethanol and 15% gasoline – although the exact percentages vary seasonally.

      Q. Isn’t ethanol only able to be produced from corn?
      A. No. Ethanol can be produced from a variety of materials; however, the vast majority of today’s domestic ethanol production uses corn as the basic feedstock. In 2003, 57% of the total corn grown in the U.S. was used as animal feed and 19% of the total crop was exported. Ethanol production currently consumes about 13% of the total U.S. corn crop.

      Although not yet in large-scale commercial production, “cellulosic ethanol” is an emerging technology to produce ethanol from agricultural waste and forestry residues such as corn stalks or rice husks, or from purposefully–grown crops such as switch grass or trees. The production of cellulosic ethanol results in greater greenhouse gas reductions than achieved by producing ethanol from corn.

      Q. What are the benefits of using E85 ethanol instead of gasoline?
      A. There are several benefits to using E85. Those benefits include:
      • Ethanol, the major component of E85, is a renewable fuel.
      • Using E85 helps to reduce greenhouse gas emissions.
      • Using E85 helps to reduce dependence on petroleum, and helps create greater diversity in our nation’s energy supplies and sources.
      • Using E85 has the ability to help improve vehicle performance because E85 ethanol has a higher octane rating than gasoline which allows for more horsepower and torque.
      • Using E85 helps to reduce smog-forming emissions.
      • Using E85 can help to support rural communities and the domestic agriculture.

      Q. I’ve seen some recent studies that show that the amount of energy required to produce E85 ethanol is greater than what the fuel generates when powering a vehicle. Is that true?
      A. No, current research findings prepared by Argonne National Laboratory (a U.S. Department of Energy Laboratory), indicates a 38% gain in the overall energy input/output equation for the corn-to-ethanol process. In fact, of the 12 studies conducted on this topic since 1995, nine of those studies found positive net energy balances. These studies were conducted by the USDA, DOE’s Argonne Labs, Michigan State University, Colorado School of Mines, the Canadian government, and others.

      Q. When using E85 ethanol, don’t you get decreased fuel economy than you do with gasoline?
      A. E85 ethanol holds less energy per gallon than gasoline. Therefore, drivers may experience a 25 percent shorter cruising range on E85 ethanol than with gasoline depending on their particular vehicle and their driving habits/conditions.

      Q. How much gasoline does E85 save?
      A. Comparing gasoline fuel use over 1,000 miles:

      E85 Fuel Regular Gasoline
      Gasoline Used

      15mpg Vehicle 10 gallons 66 gallons
      20mpg Vehicle 7.5 gallons 50 gallons
      25mpg Vehicle 6 gallons 40 gallons
      30mpg Vehicle 5 gallons 33.3 gallons

      Q. How much emissions are reduced by using E85?
      A. Example of emissions reductions over 1,000 miles from 15mpg Vehicle:

      Carbon Dioxide 172 lbs 1208 lbs
      (60% from on-road sources)

      Nitrogen Oxides 3.3 lbs 7.26 lbs
      (43% from on-road sources)

      Carbon Monoxide 260 gph-hr 2450 gph-hr
      (59% from on-road sources)

      Hydrocarbons 103 gph-hr 125 gph-hr
      (24% from on-road sources)

      *gph-hr is term used by US EPA as unit of measurement for air emissions

      Q. I heard recently about a Stanford University study by Mark Jacobson called “The Effects of Ethanol (E85) Versus Gasoline Vehicles on Cancer and Mortality in the United States.” The study says ethanol actually increases smog and therefore increases health risks.
      A. There are notable flaws to the study, including:
      • According to the National Governors Ethanol Coalition and others, Jacobson failed to take into account the reduction in greenhouse gases the switch to ethanol would create.
      • According to the Natural Resources Defense Council, the ozone difference Jacobson found was so small it may be within the study's margin of error.
      • The study showed that the smog impact would be minimal in the Southeast because of the availability of green space.

      Q. What Goes into E85 Pricing?
      A. Wholesale prices for the fuel ethanol used to blend E85 tend to follow gasoline prices for a couple of reasons, including:
      • Most ethanol is used as a gasoline additive (e.g. E5.7, E10) and it is bought/sold through the nation's petroleum distribution system;
      • The federal excise tax credit (incentive everyone talks about) for fuel companies blending ethanol/biodiesel can directly and indirectly connect the prices of these fuels. The incentive reduces the federal road tax owed by companies involved and results in gasoline prices becoming a 'benchmark' of sorts for fuel commodities;
      • The balance of supply/demand is typically the biggest influencing factor in pricing. In spring 2005, ethanol supplies were high and wholesale prices were very low. In summer 2006, ethanol prices spiked when demand outstripped supply. Most authorities attribute this sudden demand shift to oil companies dropping the MTBE additive and moving to wider use of ethanol. Most recently, prices have stabilized -- supply appears to be catching up with demand.

      Q. In terms of cost, which is more expensive – gasoline or E85 ethanol?
      A. The price of E85 ethanol varies by market and can fluctuate just like any other fuel. During the spike in gasoline prices in September 2005, the price of E85 ethanol was as much as 60 cents a gallon less than gasoline in some places. In 2006, the price of ethanol has reached new highs as refiners abruptly replaced the additive MTBE with ethanol. This sudden increase in demand has produced a temporary price spike that has made E85 ethanol more expensive than gasoline in some areas. However, ethanol production costs are significantly below today’s price of gasoline. In the future, we expect E85 ethanol to be cheaper per mile than gasoline when gas prices are high and more expensive per mile when gas prices are low.

      Q. How do vehicles powered by E85 ethanol operate? If E85 ethanol fuel is not available, does that mean the vehicle will not run?
      A. E85 flexible fuel vehicles are designed to be able to run on E85 ethanol, gasoline, or any blend of both fuels. So even if E85 ethanol is not available, the vehicle will operate just fine on gasoline. The engine control module in a flexible fuel vehicle helps to identify what fuel or blend of fuels is running through a vehicle’s system. Based on the data provided, the system then makes adjustments accordingly.

      Q. What are some of the federal tax incentives currently available?
      A. There are several federal tax incentives currently available, including:

      • Volumetric Ethanol Excise Tax Credit (VEETC) - provides ethanol blenders/ retailers with $.51 per pure gallon of ethanol blended or $.0051 per percentage point of ethanol blended (i.e., E10 is eligible for $.051/gal; E85 is eligible for $.4335/gal). The incentive is available until 2010.
      • Section 1344 of the Energy Policy Act of 2005 - extended the tax credit for biodiesel producers through 2008.
      o $0.51 per gallon of ethanol at 190 proof or greater
      o $1.00 per gallon of agri-biodiesel
      o $0.50 per gallon of waste-grease biodiesel

      Q. Is ethanol currently available in South Carolina?
      A. Currently there are 43 locations in South Carolina that offer E85 and with this legislation the Energy Office predicts an additional 20 - 40 will come online next year based on retailer interest.

      Q. Why does the South Carolina Energy Office drive a large utility truck?
      A. Though the Avalanche only attains a fuel economy average of 15 miles per gallon, since the truck only operates on E85, over 1,000 miles the truck uses 56 less gallons of gasoline than the average vehicle. The Avalanche is a tool to promote South Carolina agriculture and identify opportunities for alternative fuel.

      Sentiment: Strong Buy

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