Alternative Energy Corn is Awesome

Published on June 17th, 2013 | by Jo Borrás

18

Gap Between Ethanol Prices and Gas Prices Continues to Widen

June 17th, 2013 by  
 

Corn is Awesome

The price gap between ethanol prices and gasoline continues to widen, according Bloomberg, who says the “discount”, or the cost incentive to choose ethanol over gas has increased from “0.26 cents to 36.55 cents a gallon, the steepest since April 26, as a June 5 Energy Information Administration report showed production climbed to the highest level in more than 11 months.”

“It just seems like a lot of gallons have showed up,” said Jim Damask, a broker at StarFuels Inc. in Jupiter, Florida who cites that supply for (ethanol) has gone up, but demand remains relatively low. “We’re seeing a lot of physical for sale and not a lot of buyers.”

Why are Ethanol Prices So Low!?

 

That lack of demand probably has a lot to do with deliberate lies spread by Big Oil lobbyists, bogus studies by GOP puppet-groups claiming ethanol production leads to higher food prices, old-school backwards mechanics who incorrectly claim that ethanol detracts from engine performance, and the false impression that ethanol production benefits from more government subsidies than oil or gasoline.

That’s just my thinking out loud, of course – but there is no question that demand for octane-boosting ethanol as a fuel is lower than it has been. Bloomberg states that “ethanol-blended gasoline made up 89 percent of the total U.S. gasoline pool last week, the least since Feb.”

February? Isn’t that about the same time Big Oil got their a**es handed to them in this landmark court case? Why – yes, it is! No wonder they’ve kicked their marketing machine into overdrive!

Here’s hoping that the American citizens wise up. Or, at least, that they start to take advantage of low ethanol prices and just happen to help clean up the air, produce American jobs, and advance the cause of renewable, domestic fuels.

You can check out the original Bloomberg piece at the link, below. Also, in deference to Adventure Time’s copyrights, that’s “Jack the Corn Dog”, not in any way “Jake the Awesome Adventure Time Dog”.

Source: Bloomberg, Image: FunnyJunk.


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About the Author

I've been involved in motorsports and tuning since 1997, and write for a number of blogs in the Important Media network. You can find me on Twitter, Google+, or at my shop in Palatine, IL.



  • george

    In order to break even with E85 vs. gasoline you would have to have a 29% discount on the E85. This is due to the difference in btu content between the two fuels. This could be why many people prefer gasoline over E85.

    • Jo Borras

      Your math is faulty there, Georgie-boy.

    • PrezNixon

      george, according to your logic, where only the btu content of the fuel will determine MPG, all 2 liter engines would all get the same MPG. Of course we know that is false, because when we talk about anything besides E85, we comprehend that btu is not the only factor in the MPG in gas motors.

      We all understand that different gas motors (even of the same displacement) can get very different MPG using gas with the same btu content.

      So clearly btu content is not a direct link to MPG, and we all accept this without even thinking about it when it comes to gas motors.

      Why is it all the sudden when people start talking about E85, that one single fuel quality suddenly becomes a hard fixed rule in some people’s minds?

      • george

        If you have the same engine, say this 2.0 liter that you are speaking about, then the btu of the fuel used would make a difference. The only way an engine could produce more power from a lesser fuel, E85 ethanol, is if you tune that engine to that fuel and I would pretty much guaranty that the gas engine would produce more horsepower because the fuel has more btu per gallon than E85.

        • george

          Meant to say the gas engine has to be tuned to its fuel only to be fair.

  • UncleB

    mixing methanol with gasoline then feeding it to a gasoline burner and expecting gasoline performance is the error? Feed the methanol to a burner specifically designed for methanol? Some fuel cells convert methanol to electricity? Some 2 stroke methanol/water engines were designed?

    • Jo Borras

      There are more errors than that. Gasoline engines are built to run gas, which burns more quickly and which makes a lot more excess heat. A boosted engine with proper management can make more power, and do more work, than a much larger gas engine. There is much more math involved than the “btu is all that matter!” Crowd will admit to, probably because they are too lazy to think beyond the soma.

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  • PrezNixon

    One reason why there is a growing gap between E85 and gasoline is pure price manipulation. If you look at the price trends for diesel and E85 for the last few months, they are following similar tracks.

    But regular gas took an outrageous leap a week before the Memorial Day holiday weekend at the end of May, and has stayed high since then. This leap wasn’t supported by any market changes, it is pure yearly market manipulation.

  • LauraKearns

    The U.S. needs to put more focus on investing in replacement
    fuels for transportation. We’re falling behind other countries because we’re
    failing to accept other viable fuels as alternatives to oil. It’s time to accept ethanol, methanol and natural gas for transportation fuel, which will
    lower fuel prices, create jobs, spur economic growth, reduce pollution, improve
    national and global security, and eliminate the need to send our sons and
    daughters to faraway lands to ensure the free flow of oil.

  • Joe

    comment test

  • Dave

    Engines are designed to burn specific fuels. Just because they can ‘burn’ other fuels does not make those fuels viable from a performance or economic perspective. If ethanol, electric, Natgas, biofuel are viable from BOTH an econominc (not subsidized) and performance perspective people will clamor to get there hands on both the vehicle and the fuel with very little debate. When a product/process has to be force into the market such as ethanol et al it is a very good indication that the BOTH requirements referenced above have not been met.

    If you think the government has some great foresight and concern about what is best then please answer the following. Why didn’t the government add an improvement multiplier to the CAFE standards in the late seventies? Had they instituted a 1% improvement, year over year requirement the fleet economy would be at 30 mpg today vs. 23. If you believe CO2 is bad then how many billions of tons would not be in the eco system today? My answer is they didn’t add the multiplier because it is not ‘sexy’ to be proactive and show professional management of a process like this. It is sexy to puff up and say we are saving the planet, creating energy independence all of which would have been better accomplished with the 1% multiplier.

    After all what group of unions, management, workers are going to say to the American public, ‘ no that is beyond our mental and physical capabilities to improve our product 1%’. Not likely.

    So it is still the politician who legislated mediocrity.

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