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Gas Prices Too High? Well, E85 ethanol blend is 40 cents cheaper
GF Herald ^ | Mar. 21, 2004 | Lisa Davis

Posted on 03/21/2004 5:59:59 AM PST by wallcrawlr

Gas prices are rising across the country. But if you have the right car in the right town, you can save an average of 40 cents per gallon by filling with E85. A fuel consisting of 85 percent ethanol and 15 percent gasoline, its advocates say E85 is better for the environment than straight gasoline. Kim Christianson, energy program manager with the North Dakota Department of Commerce, said ethanol offers great benefits to farmers in the state, to the environment, and to the user. "It's a direct benefit not only to folks who produce ethanol, but to farmers and land owners who grow corn," he said.

Cheaper than gas

And, lately, it benefits consumers because of its cost.

"Ethanol costs should be more stable than regular gasoline," Christianson said.

That's certainly the case at Cenex in Devils Lake.

Like everywhere else in the country, gas prices in Devils Lake have increased along with global crude oil prices as OPEC tightens production. On Friday, gasoline prices stood at $1.82 for unleaded or super unleaded.

But the price of ethanol, determined by things such as corn prices and tax policy, has stayed steady. E85 was selling for $1.39 a gallon Friday.

Emil Gregory, manager at the station, said the E85 became available there in January.

He said sales haven't been great - averaging at about 1,000 to 1,500 gallons each month - but Farmers Union Oil feels that a new source of energy, especially one that benefits the state, should be used locally as much as possible.

"We have two ethanol plants in North Dakota, so why not support our own corn growers?" he said.

That was another point Christianson brought up. Because E85 is just 15 percent gasoline, using it also reduces the country's dependence on foreign oil.

Disadvantages

But there are some disadvantages, too.

Christianson said cars running on E85, rather than gas with 10 percent ethanol, see a drop off in the number of miles they can travel per gallon of fuel. And only certain cars can run on E85.

"It can be used in 'flexible fuel' vehicles only," Gregory said.

Most cars that can use E85 were built after 2000. In a flexible fuel vehicle, onboard diagnostics "read" the fuel blend, enabling the driver to fuel with E85 or gasoline in any combination from a single tank.

He said the easiest way is to find out if you can fill your car with E85 is to check your car's manual or to contact your dealer.

But he added that more motor companies are beginning to manufacture cars that can use alternative fuels.

Availability

Although E85 may be better for the environment, it's simply not available everywhere yet.

Stamart in Grand Forks used to sell it, but decided to drop it because sales didn't go well.

In North Dakota, there are five stations that carry E85 in Fargo, West Fargo, Devils Lake, Bismarck and Oakes. In Minnesota, 90 stations carry the fuel, including one in Moorhead.

Christianson said the goal of the governor's office is to get at least one E85 station in each of the major cities in North Dakota: Grand Forks, Fargo, Bismarck, Devils Lake, Minot, Dickinson, Williston and Jamestown.

They also are working with some of the smaller areas to make the fuel available, offering matching grant dollars to assist with the cost of installing E85.

In addition, he said, the two offices are working on a marketing initiative for ethanol to make people aware of E85.

Until then, he said they will concentrate on getting people to fuel with 10 percent blend.

"We really just to want to get word out about ethanol fuel and its benefits to North Dakota," he said.

He said between 25 percent and 30 percent of vehicles that now refuel use an ethanol blend. They hope to increase that number to 50 percent in three years.

• For more information, visit www.e85fuel.com.


TOPICS:
KEYWORDS: ethanol; gasprices
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1 posted on 03/21/2004 6:00:00 AM PST by wallcrawlr
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To: wallcrawlr
But the price of ethanol, determined by things such as corn prices and tax policy, has stayed steady. E85 was selling for $1.39 a gallon Friday.

The solution is not to buy ethanol, it is to reduce taxes on gasoline to the same level levied against ethanol.

2 posted on 03/21/2004 6:02:31 AM PST by dirtboy (Howard, we hardly knew ye. Not that we're complaining, mind you...)
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To: wallcrawlr
How much of that is subsidized? You're still paying for it.
3 posted on 03/21/2004 6:03:03 AM PST by sigSEGV
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To: dirtboy
Christianson said cars running on E85, rather than gas with 10 percent ethanol, see a drop off in the number of miles they can travel per gallon of fuel.

Well, if you're driving less miles per gallon, you're filling up more often, which means you may be paying the same anyway! Depends on what the drop off is, of course.

4 posted on 03/21/2004 6:15:57 AM PST by Azzurri
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To: sigSEGV
How much of that is subsidized? You're still paying for it.

The primary subsidy for ethanol is actually a tax break - ethanol is not taxed at the same rate as gasoline - because without the tax break, ethanol wasn't competive (it might be marginally competive at current prices). In addition, the corn feedstock receives federal subsidies, thereby increasing the supply and driving the price down.

5 posted on 03/21/2004 6:18:40 AM PST by dirtboy (Howard, we hardly knew ye. Not that we're complaining, mind you...)
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To: Azzurri
Alcohol has fewer BTUs than gasoline.
6 posted on 03/21/2004 6:22:49 AM PST by Eric in the Ozarks
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To: wallcrawlr
It requires more energy to produce a gallon of ethanol from corn than is released by using the ethanol as fuel. Ethanol use contributes. The difference in price is a result of tax subsidies at many levels. Ethanol use is actually harmful to the nation's attempt to be energy independent. It is, however, very popular in the farm states, where voters enjoy the subsidies.
7 posted on 03/21/2004 6:40:43 AM PST by LOC1
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To: wallcrawlr
It requires more energy to produce a gallon of ethanol from corn than is released by using the ethanol as fuel. Ethanol use contributes. The difference in price is a result of tax subsidies at many levels. Ethanol use is actually harmful to the nation's attempt to be energy independent. It is, however, very popular in the farm states, where voters enjoy the subsidies.
8 posted on 03/21/2004 6:40:48 AM PST by LOC1
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To: Eric in the Ozarks
Ethanol has approximately 1/2 the heating value of gasoline.
Heating value is the number Engineers use to determine the maximum theoretical efficiency possible from a hydrocarbon fuel used in combustion.
So a mixture of 85% Ethanol and 15% gasoline would result in
a 42% reduction in efficiency or an increase of 42% fuel for the same distance.
Please report the increase in pollutants caused by this increase in Ethanol.
Since I do not report to Archer Danial Midland Corp., I feel free to discuss the truth.
9 posted on 03/21/2004 6:42:03 AM PST by curmudgon1 (False Hopes)
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To: curmudgon1
I'm a practicing peddler of petroleum products by profession.
10 posted on 03/21/2004 6:52:29 AM PST by Eric in the Ozarks
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To: dirtboy
Bottled water is more expensive than gasoline. Tax That!
11 posted on 03/21/2004 6:54:44 AM PST by BobS
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To: wallcrawlr
---as an aside, I'd like to know a little more on the physical production of ethanol--for example, what are the boilers fueled by in the distillation process?
12 posted on 03/21/2004 6:56:47 AM PST by rellimpank
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To: rellimpank
Depends on where they're located. ADM's plants in Decatur and Cedar Rapids are fueled by coal, burned in fluidized bed (limestone injection to control emissions) boilers. The smaller plants around the midwest are fueld by natural gas. In both cases, it takes more heating value to make ethanol than is in the ethanol. But using a low rank fuel like coal to manufacture a high rank fuel does seem logical.
13 posted on 03/21/2004 7:04:12 AM PST by Eric in the Ozarks
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To: wallcrawlr
There's a federal excise tax credit of 52 cents per gallon of ethanol on ethanol-gasoline blends, so the $1.39 a gallon for E85 quoted in the article actually includes a 44.2 cent tax credit to the blender. On an equal tax footing, therefore, the price of the E85 comes out to $1.841 cents per gallon, two cents more than the gas price quoted in the article.

Who's picking up the difference? You and I, the taxpayers.

Ethanol is a big, fat ripoff, lining the pockets of the agribusiness giants like ADM at the expense of the consumers and taxpayers.

14 posted on 03/21/2004 7:11:58 AM PST by mvpel (Michael Pelletier)
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To: mvpel
Ah, yes. Remember when the referred to Bob Dole as the Senator from ADM ?
15 posted on 03/21/2004 7:13:43 AM PST by Eric in the Ozarks
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To: Eric in the Ozarks
--thanks. That confirmed my suspicion. I have a long time friend in Wisconsin who sold light industrial machinery for years. He was visiting an ethanol plant and casually stated that "you must use a lot of this in the manufacturing process"---The reply was on the order of "oh, no--this stuff is too expensive"---
16 posted on 03/21/2004 7:15:16 AM PST by rellimpank
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To: mvpel
--it also buys farmer votes for incumbent senators of both flavors in the great midwest. I never cease to be amazed on my infrequent trips back to southwest Wisconsin in the summer.

When I was a kid corn, oats and alfalfa were rotated as crops--now it's CORN as far as the eye can see---

17 posted on 03/21/2004 7:22:32 AM PST by rellimpank
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To: dirtboy
The solution is not to buy ethanol, it is to reduce taxes on gasoline to the same level levied against ethanol.

That just means paying more taxes elsewhere to make up for the loss and pay for roads and such.

18 posted on 03/21/2004 7:24:11 AM PST by templar
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To: templar
That just means paying more taxes elsewhere to make up for the loss and pay for roads and such.

Or we could try the radical concept of eliminating stupid spending that government shouldn't be doing so that our tax dollars go for something useful, such as roads.

19 posted on 03/21/2004 7:25:46 AM PST by dirtboy (Howard, we hardly knew ye. Not that we're complaining, mind you...)
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To: rellimpank
Interestingly, some cheese plants also make ethanol as a by-product. At one Kraft plant in Minnesota, about three truckloads of 200 proof alcohol is produced everyday. Because of the cleanliness of the plant and purity of the product, Kraft's management wanted to introduce their alcohol into various consumer products like mouthwash and aftershave. Trouble was, the ethanol contained an overwhelming spearmint taste and smell, so the cheese alcohol continues to be used as a gasoline oxygenate.
20 posted on 03/21/2004 7:27:52 AM PST by Eric in the Ozarks
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