[John Geyer]

How=Help

[Maceman]

Why does Ethanol additives cause gas prices to rise? ^

They does?

[Pukin Dog]

The answer is complicated, but the short version is that it takes more energy to produce Ethanol then Ethanol itself gives back in the form of fuel.

[ASA Vet]

The Gasoline companies charge high prices

Because they can.

[nhoward14]

There are several reasons that costs are higher with ethanol-added reformulated gas.

The market for the ethanol-added gasoline is not large - primarily the Midwest - and only a handful of refineries in the region are even producing ethanol.

Ethanol cannot be transported via petroleum pipelines because it tends to soak up water. It is typically transported by tanker truck, which limits the regions where it will be used.

Ethanol evaporates more quickly than other additives, so it must be mixed with low-volatility gasolines to meet government standards. These low-volatility gasolines are more expensive to make.

[sarasota]

Then why is ethanol gas in Iowa 20 cents cheaper than the "real" stuff in Illinois?

[HEY4QDEMS]

Because we allow it to.

[Iowa Granny]

The problem is the DEMAND for Ethanol. Big Oil is bidding the price up (and if I were REALLY cynical, I'd think this is a consipiracy to price Ethanol out of the market and to force the hands of those states who have outlawed MTBE, which is a known carcinagen).

The assumptions you've made would be correct under ordinary circumstances. Unfortunately these are not ordinary times.

Similar things will occur when domestic hydrogen automobiles are introduced.

Big Oil companies had a 19% increase in profits last quarter, they intend to keep it that way. The easiest way is to force Ethanol out of the competition and to create ill will against Ethanol at the same time.

[newgeezer]

1. I think I heard the cost of the switch from MTBE to ethanol in the refineries has something to do with what you're seeing. But, since I'm in flyover country where MTBE has never been used, I haven't paid much attention to it.

2. It could be that the supply of ethanol cannot keep up with the sudden increase in demand. I do know many new ethanol plants are currently in various stages of planning/construction.

[KarlInOhio]

Other problems is that ethanol loves to mix with water (hydrophilic), unlike gasoline. Therefore it is harder to handle and ship. If you mix some water in with gasoline, they will naturally separate. To get water out of alcohol you have to redistill it.

Next, I don't think anyone has built ethanol pipelines yet, so ethanol has to be trucked to where it is used which costs more than just piping it.

Finally, anytime you change what goes into gasoline, refineries and shipping points have be shut down to handle the change over. Since refineries are running at close to 100% of their rated capacity already, there isn't any capacity to pick up the slack during changeover. That causes price increases and shortages.

[Red6]

Refining.

You can't stick corn cobs in your engine can you?

[Brilliant]

Why would making something here necessarily make it cheaper?

[ARealMothersSonForever]

http://www.freerepublic.com/focus/f-news/1617340/posts
A keyword search on E85 and ETHANOL will give you scads of FReeper wisdom. The big thing is converting from MTBE, which was not water soluble and noncorrosive, to Ethanol; which absorbs water and becomes contaminated very easily, and is corrosive. Ethanol manufacturing is currently government subsidized. Some argue about that being good, bad or indifferent. It just is. Storage tanks must be cleaned and dessicated before delivering ethanol blends. Pump filters must be replaced, to prevent contamination. All of this costs money, and disrupts supply. Thus impacting cost.

[Trust but Verify]

John,

The price of a gallon of ethanol is higher than the price of a gallon of gasoline. If you replace 1/10% os a gallon of gas with ethanol, you are adding a higher-priced product, which raises the price of the gasoline.

E85 gas is actually cheaper than regular unleaded gasoline right not, but that is due to a government subsidy which I understand is about $.50/gallon.

[Al Gator]

John,

Ask yourself this:

How many gallons of gas does it take to farm the acreage needed to produce the number of bushels of corn needed to be be refined into a gallon of ethanol.

Now, add that to the amount of fuel needed to fire the still to refine the brew to a level of alcohol that it can be used as fuel.

It takes about 5 gallons of brew to get to about 1 gallon of usable ethanol.

Ethanol aint cheep!

[Herakles]

let me do a calculation that may not be exactly correct;

1 gallon of gas = $ 3.00

1 US gallons = 3.7854118 liters; so

3.7854118 liters = $3.00

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

Replacing 15% of gas with ethanol;

.85(3.7854118 liters = $3.00) = 3.22 liters = $2.55

3.7854118 - 3.22 = .57

(.57/1.5)11.00 = $4.18

so gas with 15% vodka should cost $2.55 + $4.18 = $6.73

which is why we do not use vodka to fuel our cars; however this points out an important fact; if ethanol were the price of gas or less we would have been using it long ago, but it is nowhere near that so when it is added, the price of gas will go up.

[Bommer]

There was no provision ot have a supply line for ethenol! Replacing the millions of gallons of the MTBE was no match for what supplys we had in place. this is the Senates fault. The companys had no alternative but to discontinue the additive to avoid lawsuits.

[stockstrader]

Because gasoline is cheap relative to other energy products.

As of 5 minutes ago, worldwide gasoline spot market price (for June delivery) is $2.12/gallon. Worldwide spot market price for ethanol (May delivery) is $2.62/gallon!

It's a good thing our cars don't run on 100% ethanol--or we'd be paying about 50 cents/gallon more than we are for just gasoline.

I guess that the ethanol companies are 'ripping us off' even more than the oil companies then, right? (sarcasm--off)

[OldFriend]

Fuel efficiency is diminished with ethanol. Therefore, we buy more fuel.

This is the congessional solution to all problems. MAKE THEM WORSE.

[defenderSD]

The whole disgraceful ethanol story is right here in this thread.