Posted on 07/04/2009 7:19:38 AM PDT by stan_sipple
Minnesota has been an unofficial testing ground for using ethanol to fuel vehicles, but after years of steady increases, interest appears to be waning.
Despite a push from the governor and an increase in the number of so-called flexible-fuel vehicles on the road — which can run on either gasoline or a mostly ethanol blend — sales of E85 have dipped in recent months, beyond the normal decline in winter months.
In February, sales of E85, a cleaner-burning fuel consisting of 85 percent ethanol and 15 percent gasoline, hit their lowest mark since 2006, according to a new report by the Minnesota Department of Commerce. Sales, which bottomed out around 1 million gallons per month, started to rebound this spring but are still lagging last year’s numbers.
In May, about 1.5 million gallons of E85 were sold — almost 1 million gallons less than in May 2008.
Nebraska does not report separate statistics on E85 sales, but its overall ethanol sales dropped to their lowest levels in two years in February, before rebouding slightly in March, according to the most current figures available from the Nebraska Department of Revenue.
Minnesota has more E85 gas stations than any other state, and domestic automakers — the biggest makers of flex-fuel vehicles — would sometimes target promotions on flex-fuel vehicles here. But the domestic auto industry is in shambles, and much of the recent auto industry push to greener vehicles has focused on plug-in hybrids and high-mileage smaller cars.
The ethanol industry has also been reeling from high corn prices last year and the credit crunch. Some of the largest ethanol makers are in bankruptcy and being forced to sell plants, some of which they built but never opened.
Even the number of E85 pumps has declined slightly in recent months, from 360 in February to 351 in May. It is one of the first noticeable dips in the number of E85 stations since well before the state offered up $1.75 million in subsidies in 2007 for station operators to install E85 pumps.
The number of E85 pumps in Nebraska has also dipped slightly, to 54 as of May 22, down from 58 at the end of the year. Though there are still twice as many pumps as there were at the end of 2007.
Ethanol proponents blame at least some of the recent sales decline on the recession. The American Automobile Association has predicted there will be a 2.6 percent decrease in road trippers this Fourth of July weekend compared with last year.
Another reason, proponents say, is the decline in gasoline prices from a year ago. Since E85 fuel gets fewer miles per gallon than regular gasoline, many drivers will not buy the ethanol blend unless it’s 40 to 60 cents per gallon cheaper than regular fuel — the point at which it is generally cheaper to drive with E85.
Consequently, when regular gas prices are high, people are more likely to fill up with E85 and when regular gas prices drop, E85 takes a back seat, said Ralph Groschen, a marketing specialist and ethanol expert for the Minnesota Department of Agriculture.
But even as gas prices start to climb this summer and E85 sales make their seasonal jump, officials are hesitant to predict another heyday for E85 like the one seen in 2008, when regular gas prices hit records and more than 22 million gallons of E85 were sold in the state.
“It really depends on what the price of gasoline is going to do,” Groschen said. “I don’t have that glow in my crystal ball.”
On Friday, the national average cost of regular gas was $2.63 a gallon and E85 was $2.12, according to AAA’s Fuel Gauge Report.
E85 is generally less expensive than regular gasoline because of subsidies from the federal government. The subsidy given to ethanol blenders was cut this year from 51 cents per gallon to 45 cents, a figure based on pure ethanol.
Good news. Except under the new Marxists in power, ethanol will likely become mandated for a certain percentage of the driving public’s automobiles, no matter the cost or any other problem associated with such a mandate.
Ideas have consequences. Acting on stupid ideas results in poor outcomes.
Burning ethanol for fuel emits twice as much CO2 into the atmosphere than its gasoline equivalent emits.
The Minnesota legislature has mandated 20 percent ethanol for 2012...
If the current administration proves successful with its policies, there will be a greater need for ethanol than ever before.
The Minnesota has mandated a sizeable increase in CO2 emissions.
There was an article back in the winter of a school system that used ethanol in their school buses. When it got really cold, the ethanol froze and they couldn’t run their buses. Apparently gasoline has a lower threshold for freezing, but in Minnesota, they need something that doesn’t freeze.
Eric Peters had an excellent column on how the government mandates higher mileage and then puts out requirements that causes cars to get lower milage. Ethanol is just one of those, 10-15 percent less MPG with 10% Ethanol mixed into gasoline than with pure gasoline.....I found that myself years ago when my Geo Storm milage dropped from 33mpg to 29 mpg for my daily commute in city traffic to work, after the 10% ethanol was made mandatory by the state of Maryland. Geo Storm was 5 speed, 4 cylinder.
I think that was soy oil additized diesel, aka biodiesel. When you get to IA-Minnesota winters, you’d better have more than a tank heater...
Its not how good an idea is which counts, it is how well it is implemented. A poor idea well implemented is better that a good idea poorly implemented. Unfortunately, Uncle Sam tends to come up with poor ideas and to implement them poorly at great expense. The purpose seems to be not whether the idea works or not, but do certain groups or persons become prosperous and does the Federal Government obtain more effective control over certain of our life’s decisions.
All I read is blah blah blah. Maybe the sales are down because it’s crap. The stuff is hard on the engine period.
ethanol makes my van stall out. I have also heard from diesel mechanics that “green diesel” makes engines seize up because the fuel gums them up.
They just can’t leave America alone.
They think they have to change everything.
We’re being led by idiots or wusses in just about every state but Alaska.
Sorry I forgot to say “have a great 4th” keep our fighting men and women in our thoughts as we fire up the BBQ today and for all those attending tea parties this weekend, give ‘em hell.
Climate this year has been colder and wetter (on the ground). Farmers have been delayed in planting. That translates as less fuel use. Add to that the worldwide Obama Depression and there you have it ~ less demand for ethanol.
Ethanol is just more corporate welfare
So, without socialist support, this unmarketable product would have hit the skids early in a capitalist system. Any time you burn food to supplant an easier acquired resource, you have to credit stupidity for the expensive consequences.
With the Senator they just elected, more than half of them should be required to drive ethanol powered clown cars that run on Cutty Sark.
LOL.
Non denatured ethanol I’m thinking.
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