Why does Ethanol additives cause gas prices to rise?

[John Geyer]

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.

[Jimbaugh]

Archer Daniels Midland !!!!

We have the best government that money can buy.

In 1996, ADM was the subject of the largest price fixing investigation in history. Senior ADM executives were indicted on criminal charges for engaging in price-fixing with in the international lysine market. Three of ADM's top officials, including vice chairman Michael Andreas, were sentenced to federal prison in 1999 and the company was fined $100 million, the largest antitrust fine ever. ADM's annual report 2005 states that a settlement was reached under which ADM paid $400 million in 2005 to settle a class action antitrust suit (note 15, p. 52).

http://opensecrets.org/orgs/summary.asp?ID=D000000132&Name=Archer+Daniels+Midland

[Iowa Granny]

. I wonder if there are any reductions in methane emissions from livestock if the grain is processed first.

I suppose. If you fed the DDGs exclusively to swine. Pigs don't belch.

[hgro]

The reason behind this is coming from the petroleum industry. They want sole control of the market and have their minions churning out anti-ethanol propaganda like crazy.

[Iowa Granny]

They want sole control of the market and have their minions churning out anti-ethanol propaganda like crazy

I agree. 100%

In 10 years, I think Big Oil will own all the small Ethanol plants that are being built today.

[TFMcGuire]

30% is a fair rule of thumb, although as you say, a couple of energy transformations occur.

In modern low compresssion engines, the octane benefit does not offset the reduced chemical energy of the molecule.

Ethanol does cause a significant reduction in vehicle mileage with family cars---even those able to run on E-85.

[tortoise]

At the liquor store, 1.5 liters of vodka (assume 100 proof potato ethanol) = $11.00

A big chunk of that price is excise taxes, which are stiff. Excise taxes average ~40-50% of the cost of producing distilled spirits in the US.

However, dehydrating ethanol so that it can be used as fuel is energy intensive, so that number is probably pretty close to the mark after you add in the additional refining that would have to be done.

[Mr. Lucky]

I agree. But in a high compression engine, or a low compression engine with a supercharger, the fuel economy advantages of gasoline can disappear. The reason I say "can" disappear is because a properly tuned alcohol engine will generate so much more power than an 87 octane gasoline engine of the same displacement. That increase in power can manifest itself in fuel economy if the driver is able to "keep his foot out of the carburetor" as we used to say. Even at high prices, however, most of us can't resist applying the extra power to increase performance rather than fuel economy.

[TFMcGuire]

Biodiesel has much to recommend it. At this point, however, Ethanol is its own worst enemy.

Oil companies are not worried in the slightest that alcohol will ever reduce oil sales.

More expensive to produce
viable economically only under government subsidies
less energy therefore lower mileage
harder to ship and store

Biodiesel has much to recommend it, however.

Like doctors being afraid of health food/medicine quacks.

If a few of their patients start hitting the television doctors then over worked doctors may get a day off occassionally.

[Mr. Lucky]

I'll bite. Why do you think ethanol is expensive to produce?

[TFMcGuire]

er, eliminate the 2nd biodiesel.

[thackney]

Ethanol has 76,100 BTU's per gallon

Gasoline has 114,100 BTU's per gallon

Less energy available means it take more gallons to move the car the same amount.

http://www.nafa.org/Content/NavigationMenu/Resource_Center/Alternative_Fuels/Energy_Equivalents/Energy_Equivalents.htm

Even when specifically designed to run on ethanol, vehicles are going to get worse mileage.

http://www.edmunds.com/insideline/do/AutoshowArticles/articleId=108748

"The 9-5 BioPower can also run on any mixture of ethanol and gasoline," said Jan-Willem Vester, corporate communications manager for Saab Cars USA. If you can't find a gas station with E85 on tap, you just fill up with the regular stuff and the engine management system adjusts the timing and boost accordingly.

"Mileage is approximately 30-percent worse on ethanol," Vester concedes, "but ethanol is typically 20-30 percent less expensive [at the pump], so for customers it's budget-neutral."

---

If ethanol demand goes up, and carries the same taxes gasoline does, do look for a cheaper price.

[thackney]

A tax exemption is not a subsidy.

You sound like Clinton redefining "alone" and "is".

If the Federal Government gives money to, or waives taxes of one product over the other, it is a subsidy.

[thackney]

We cannot figure the cost of production into BOTH ethanol and feed.

Starches are feed as well. It may not be the most needed component, but to remove it from the feed would require something to replace the caloric input. (I think)

[Mr. Lucky]

Fair enough, but isn't federally granted immunity from liability just as much a subsidy? Without this subsidy, oil companies have all dropped MTBE's and moved to ethanol.

[thackney]

In an internal combustion engine, the lower heat content of alcohol can be offset by certain advantages in its combustion properties.

You must know more about engines than Saab.

Saab 9-5 Aero BioPower Concept

"The 9-5 BioPower can also run on any mixture of ethanol and gasoline," said Jan-Willem Vester, corporate communications manager for Saab Cars USA. If you can't find a gas station with E85 on tap, you just fill up with the regular stuff and the engine management system adjusts the timing and boost accordingly.

"Mileage is approximately 30-percent worse on ethanol," Vester concedes, "but ethanol is typically 20-30 percent less expensive [at the pump], so for customers it's budget-neutral."

----------

Too bad that cheaper part didn't hold very long.

[Mr. Lucky]

Some of the caloric value of corn is used for heat, the need for which can be controlled by herd management. Most of the caloric value of corn, especially for ruminants, is left in the feed lot. In the good old days, we let our hogs "follow" our cattle and our chickens "follow" or hogs. Contract buyers kinda frown on that nowadays.

But most of the protein value of raw corn is also wasted (it's simply not digested). DDG's or gluten meal is much more efficiently digested, so the distillation process actually increases the efficiency of the corn.

Hey, Granny.

[Mr. Lucky]

You're comparing the fuel consumption of both cars at peak performance. The peak performance of the engine on ethanol is much higher. All you gotta do is keep your foot out of the carburator when you're running on ethanol.

[newgeezer]

You sound like Clinton redefining "alone" and "is".

Nice try but, as opposed to the person in your bad analogy, I actually pointed you to the dictionary definition. If you're truly up to the task, try reasoning instead of name-calling.

If the Federal Government gives money to, or waives taxes of one product over the other, it is a subsidy.

That's your definition, not the dictionary's. If you have a problem with that, tell it to the people at Merriam-Webster.

[thackney]

My problem is not with the terminology, it is with the dollars. We can call it what ever you would like. But it is still wrong.

[thackney]

That does not appear to be what Saab was saying.

Do you have anything to support an engine that gets nearly equal mileage on ethanol compared to gasoline?