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Posts tagged “ethanol prices”

By Robert Rapier on Nov 9, 2007 with no responses

E85 Road Test

A couple of months back, I posted Gary Dikkers’ analysis comparing the fuel efficiency of Minnesota and Wisconsin. Gary’s conclusion was: Both states have almost identical topography, climate, demographics, and about the same mix of urban/rural driving. (In fact, Wisconsin has a slightly higher ratio of urban to rural miles driven.) The two states are about as close to being twins as any two states could be. (Not counting the Vikings/Packers difference of course.) Yet fuel economy in Minnesota is worse, and their drivers buy and burn more fuel than their neighbors. The only obvious difference that jumps out is that Minnesota has mandated its drivers burn a blend of ethanol and gasoline — a fuel with a known lower… Continue»

By Robert Rapier on Sep 29, 2007 with no responses

E85 Pricing Reports

Updated: 9/29/07 When I read the following quote, I immediately thought of the recent Business Week article claiming that availability – which they claimed is being hampered by oil companies – is the primary reason E-85 is not taking hold. I don’t buy E-85 for my flex fuel Ranger even though it is readily available around here with all the ethanol plants. It’s because the price is never less than 80% of the price of E-10. I get 80% of the mileage with E-85 that I get with E-10. The above quote comes from a devoted ethanol advocate and corn farmer, who frequently posts at The Oil Drum. If he isn’t willing to spend extra money on E-85, then can… Continue»

By Robert Rapier on Sep 21, 2007 with no responses

Bill Gates’ Ethanol Losses

About the same time I was warning last year of an ethanol bubble, Bill Gates was sinking money into Pacific Ethanol (PEIX). In the same essay in which I warned of the bubble, I took a look at Pacific Ethanol, and concluded that the underlying fundamentals of the stock – even with the ethanol mandate – were not good. Since that time, Pacific Ethanol has fallen from $22.54 down to today’s value of $9.97. Given that Gates’ purchase price was $16.00 a share – and the stock ran up to ultimately around $40 before collapsing – it looked like a shrewd move for a while. And I lost count of how many people – when arguing with me about ethanol… Continue»

By Robert Rapier on Nov 30, 2006 with no responses

Ethanol Demand Boosting Corn Prices

A new story today from Yahoo News: Ethanol demand boosting corn prices Some excerpts: INDIANAPOLIS – The ethanol industry’s growing appetite for corn has pushed prices for the grain to their highest levels in a decade amid a surge that agricultural experts say could lead farmers next spring to plant their largest corn crop in 60 years. Farmers who plant more corn in 2007, however, will be betting that the nation’s burgeoning ethanol industry won’t go bust and oil prices stay high, keeping up demand for the corn used to make ethanol, said Chris Hurt, a Purdue University agricultural economist. With a growing amount of corn being diverted from food products and livestock feed toward ethanol production, per-bushel prices have… Continue»

By Robert Rapier on Nov 23, 2006 with no responses

Ethanol, Biodiesel, and Food Prices

The following story from Bloomberg caught my eye today: Ethanol Drives Up Food Commodity Prices Some notable excerpts: Nov. 22 (Bloomberg) — Global ethanol production is driving up prices for food commodities, from feed stocks such as sugar, to meat, said Datagro, Brazil’s biggest sugar-industry forecasting firm. U.S. production, forecast to increase more than 70 percent by 2012, will use 37 percent of the country’s current corn supply to meet output needs, up 15 percent from 2006, Datagro said. Land for soy oilseeds is increasingly being diverted to grow corn, reducing soy supply and driving up animal feed prices, according to the company. In China, competing demand for corn from the food and ethanol industries may lead the country to… Continue»

By Robert Rapier on Nov 4, 2006 with no responses

People in Glass Houses

VentureBeat, a Silicon Valley-based site that focuses largely on venture capital (and venture capitalists), has been hosting a series of essays on California’s Proposition 87, which will be voted on next Tuesday. The owner of Venture Beat, Matt Marshall, recently contacted me and asked if I wanted to provide some “No on 87” essays in response to Vinod Khosla’s series of “Yes on 87” essays. My response to Matt was that I am ambivalent about passage, and so would not write a “No” essay. However, he said that if I wanted to write on alleged misinformation coming from the “Yes” camp, then that would be OK as well. My first essay, Prop 87: Deceptively Marketed, addressed 3 specific claims coming… Continue»

By Robert Rapier on Apr 15, 2006 with no responses

The Future of E85

The federal subsidy for ethanol production – currently $0.51 per gallon – is set to expire at the end of 2007 (1). Unless congress extends the credit (again), consumers may finally get to pay market price for ethanol. Prior to the recent passage of the energy bill, it was widely assumed that the credit would be extended, because ethanol is still not competitive with gasoline without the credit. In fact, the recently released Hirsch report (2) on Peak Oil stated: The market for ethanol derived from biomass is influenced by federal requirements and facilitated by generous federal and state tax subsidies. And: Ethanol from biomass is currently utilized in the transportation market, not because it is competitive, but because it… Continue»

By Robert Rapier on Mar 24, 2006 with no responses

Improving the Prospects for Grain Ethanol

In my previous essay, you probably gathered that I am not enamored with grain-derived ethanol. I consider it to be a kind of fool’s gold that looks nice and shiny to the general public. Considering the magnitude of the subsidies as I showed in the previous essay, the industry is nowhere close to being able to compete on a level playing field. If the industry is to survive, you can count on multibillion dollar handouts – or mandates – as far as the eye can see. As I write this, the spot price of ethanol is $2.43, versus $1.74 for mid-grade gasoline. Considering that most people don’t buy mid-grade, you can knock another dime or so off the price of… Continue»