Posted on 04/27/2006 11:21:18 AM PDT by John Geyer
Edited on 04/27/2006 11:47:26 AM PDT by Admin Moderator. [history]
I would assume that ethanol, being produced by fermenting American grown corn into a useable fuel, would make gas cheaper, not more expensive. Instead of making the price of gas rise, I would believe that it would fall because we are using a renewable, home grown form of fuel. I guess I'm an idiot for not understanding the reasons behind this, but I ask for someone with more experience to explain it for me. I was telling my father how ethanol would make gas cheaper, and now I feel like a complete moron. Help me understand.
Corn must be planted, cultivated and harvested. It must be fermented and purified by distillation. Waste products must be removed and the ethanol must be stored in a waterfree environment. It is somewhat difficult to store and recombine with gasoline.
At the moment it is only competitive because of substantial tax exemptions and federal subsidies.
Surely the price will decrease as the marketplace finds creative solutions to some of the cost issues---using cellulose as feed material instead of starch for instance.
And I certainly advocate continued research and use of Ethyl alcohol as I advocate the conversion of coal to oil and bio diesel. I believe that having sufficient fuel of all types for the U.S. is a matter of national security.
Oil must remain our mainstay for decades to come however and the government needs to take common sense measures to allow its continued development (e.g. allowing drilling on the continental shelf and building more refineries.
Grin!
Independent Baptist!
Interesting.
Does racing fuel have a high percentage of methyl alcohol as opposed to ethyl?
"your 1.5 liters of 100 proof is only 50% ETOH by volume,
the rest is water"
Then my calculations would be on the low side of the cost.
Don't know if you remember the last gas shortage, but I think some people got caught adding water to the gas - just a trip down memory lane.
22 gal gasoline refined / 42 gal barrel crude = $1.7857 / gal (@$75/bbl)
ethanol spot price = $2.60 / gal
90% * 1.7857 + 10% * 2.60 = $1.867 / gal
$0.10 / gal producer profit
$x / gal refining/blending costs (variable)
$0.10 / gal refining profit
$0.12 / gal transportation cost
$0.09 / gal transportation profit
$0.04 / gal marketing cost
$0.04 / gal marketing profit
$0.08 / gal retailer cost
$0.08 / gal retailer profit
$0.184 / gal Fed excise tax
$y / gal State excise tax
$z / gal local tax
(see http://api-ec.api.org/filelibrary/mft04182006.pdf for various State & local taxes)
The Indy Racing League uses ethanol. The "top fuel" class in drag racing uses nitro methane.
By the way, corn is used as the ethanol feedstock of choice in the US because it's comparatively plentiful, easy to handle and transport and easy to distill. The cost of corn per gallon of ethanol produced is in the mid fifty Cent range, making production of ethanol wildly profitable in the current market.
I agree with you that subsidies distort the market, but they do so for the oil industry just as they do for any other. Congress shouldn't hand out goodies to any industry.
But what better way to conduct your thinking than to sit out on your front porch at the end of the day and pour a couple of ounces of ethanol (made from corn and aged in charred white oak for at least 4 years) over an ice cube or two.
Why doesn't you know grammar?
The cost of the corn in Ethanol may be 5o cents/gal. But the manufacture as of today is only profitable because of government subsidies which are due to expire in 2007.
Distilling capacity in this country is expanding by leaps and bounds right now - because ethanol distillation is so profitable.
I did. That's what "subsidy-like effects" means. If you're questioning why I replied as I did, my answer is simple. He posted; I replied. Words mean things. That's been my point from the very beginning.
Just because they can get you to the same place at the same time, would you likewise insist it's okay to call a HUMMER a Harley? You can buy things with cash or on credit. Would you use those terms interchangeably, as well?
As you stated previously, to do so would be to use the "wrong terminology." (How is it I'm "picking nits" now and not before? What caused you to change your mind?)
LOL. Surely you must be joking. A tax exemption fits neither of those two definitions. It is neither "monetary assistance granted" nor "financial assistance given." Do you really want to call government NOT taxing something (for a change) a GIFT?!
And to think, earlier in the thread, you had the gall to compare me to Bill Clinton because of the way I define words? LOL!
An assumption. Some is imported. Just like oil.
No they are not. They are either separated by a pig or simple placed adjacent to each other. I've been on the design team of several truck loading terminal that receive produce by pipeline. Why would anyone introduce water?
Not requiring payment is not financial assistance?
Payment for what?
Payment of taxes.
No, you misunderstand.
When you asked, "Not requiring payment is not financial assistance?," my response was to ask, "Payment for what?" What was given, for which payment normally would have been required?
For "not requiring payment" to be considered "financial assistance," there would logically have to have been something received. For example, when a university enrolls a student in classes and forgives some or all of the normal tuition, that student is said to have received financial assistance. The student receives the privileges of attending classes.
So, again, payment for what? What benefit was received for which there would normally be an obligation to pay?
If a schoolyard bully takes the lunch money from four kids including yours every day for a month, is it financial assistance to your kid if he decides to stop taking it from yours? Is the bully subsidizing your kid's lunch by letting him keep his lunch money?
Don't waste your time. Some people can redefine words to suit their agenda. Then, if you dare to call them on it, some of them will claim you're the one who's as bad as Bill Clinton redefining 'is'.
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