Sunday, September 30, 2007

Ethanol Boom Busting

Check out today's NY Times story Ethanol’s Boom Stalling as Glut Depresses Price.
...the ethanol market is suddenly plagued by a glut, in part because the means to distribute it have not kept pace. The average national ethanol price on the spot market has plunged 30 percent since May...And if the bust becomes worse, candidates for president could be put on the spot to pledge even more federal support for the industry...

The ethanol boom was set off when Congress enacted an energy law in 2005 that included a national mandate for the use of renewable fuel in gasoline...Already, ethanol producers are poised to outpace that mandate...As ethanol supply increases over the next 12 months, the challenge will be to find a home for it,”...Because ethanol is corrosive and soaks up water and impurities, it cannot be shipped through the country’s fuel pipeline network. So it must be transported by train, truck and barge, a more expensive transportation network that is suddenly finding it hard to keep up with the surge in ethanol production....Gasoline wholesale marketers have been slow to gear up ethanol blending terminals, in part because they had to invest simultaneously in equipment to manage low sulfur diesel and tougher product specifications.
Even "overproduction" will never result in enough ethanol to fuel a significant portion of America's cars. California still has only one, yes one, E100 station. Hundreds of state fleet flex-fuel vehicles now use more gasoline and cause more emissions than the gasoline-only vehicles they replaced. (We can thank Arnold for that "green" purchase.)

And blending ethanol into gasoline is complicated, and ultimately merely perpetuates our petroleum addiction.