For the E85 owners out there

[JasonA]

If she's for it, I'm against it.

Ditto here.

'Cept that she's not really "for" it. She's trying to keep up with the momentum of alternative fuels and ends up using it as a political statement against current leadership (hence the irony in her message).

[JasonA]

Note that the current administration is already a strong supporter (at least in words) of alternative fuels and ethanol:

http://www.whitehouse.gov/infocus/energy/

Sen. Clinton is just trying to get her voice out there as well.

[WarrenJ]

Iowa, a corn state, will shortly become first base for national office seekers.

No one should be surprised to find office seekers of any party suddenly discovering a new respect for ethanol.

Regards,

Warren

[JasonA]

Indeed. Whenever there is a dollar to be made, there will be stakeholders. Whenever there is an issue that gets any press time, there will be political agendas. Unfortunately, the above two usually cloud the real meaning or purpose of the subject at hand, whatever it happens to be at the time, whether it's ethanol or automobiles or soda pop.

[WarrenJ]

Ethanol Boosters Hoping For Indy 500 Win

Race cars to use ethanol blend for first time, boosting corn fuel’s profile

"Speed will be of the essence for drivers racing around the oval at Sunday’s 90th running of the Indianapolis 500, but it won’t just be the drivers hoping to win big.

For the first time in the race’s 95-year history, cars in the Indy 500 will burn a fuel that is 10 percent ethanol and 90 percent methanol. It’s a fuel change that some in the ethanol industry hope will hasten the adoption of the alternative fuel among ordinary drivers."

http://www.msnbc.msn.com/id/12740848/

[JasonA]

That's just for this year only. 10% ethanol, 90% methanol.

NEXT YEAR, it's 100% ethanol. Good for IndyCar! Let's get NASCAR off LEADED fuel now!

[JohnnyG]

I like it!

Maybe I'm missing something here though, help me out.

Right now, if there are two gas stations side by side, and one is a PENNY cheaper, I'll go to the cheaper one.

Now imagine two stations, side by side, and one has 10% ethanol blended regular, what would be the price point that would make people turn to the cheaper STRAIGHT gasoline?

Would it be $.01?

$.10?

$.50? (govt. subsidy point here)

$.75?

Would you pay a $1.00 more for Ethanol?

This assumes that people would ALWAYS want the ethanol blended product "because it means so much more" to us than just price.

Would somebody care to start a poll?

[JasonA]

I think everybody will have their own threashold on price. We in fact did an Internet survey on Fort Bragg and one of the questions was about price. The question was the very same one you posed. Something like, "what is the highest price you'll pay and still use E85", except the answers were subjective rather than objective. The choices were "Much Higher", "Slightly Higher", "Same Price", "Slightly Lower", and "Much Lower".

The results were correlated into numerical values (+2, +1, 0, -1, -2) for the respective responses. So far (just checked right now), we have 76 responses, with an average value of +.1. On average, most people want to see the same price, with a slight nod to a higher price point. Some people would only use it if it were cheaper (it IS about the money to them). But slightly more than half (numerically) said they'd pay more for an alternative fuel...but just slightly.

Given two gasoline stations, with the same product, I'll probably go to the cheaper one also.

Given a choice of E85 (not E10) vs. regular gasoline, and given the same price, I'll go for the E85, knowing that it'll cost me more per mile. If the price was a drastic difference (like +$1 or more), I probably wouldn't. And that's exactly why we haven't seen ethanol until late. E85 can't compete with $.79/gallon gasoline.

Patrick Bedard wrote a lengthy article in the newest Car & Driver, and was pretty hard on ethanol, and believe it or not, I agree with most of what he said. He takes a look at all the "promises" of ethanol, and debunks them one by one. But his whole premise is on the government mandate to increase the ethanol percentage from where it is now (something like 2%) to up near 5%.

OF COURSE an incremental increase like that isn't going to reverse global warming. OF COURSE an incremental increase like that isn't going to rid us of our petroleum addiction. OF COURSE an incremental increase like that isn't going to free us from the finger of OPEC. I believe he missed the entire FOCUS of the recent ethanol push (his objective I'm sure). Nobody is crowing about a 5% ethanol content by volume. Who cares?! 2%, 3%, 5%, 8%, it's all peanuts at that level. What will make a difference to many points above is a REAL increase in ethanol, or other alternative and renewable fuel of your choice, and he completely neglected to discuss that (surprise, surprise).

[JohnnyG]

Given a choice of E85 (not E10) vs. regular gasoline, and given the same price, I'll go for the E85, knowing that it'll cost me more per mile. If the price was a drastic difference (like +$1 or more), I probably wouldn't. And that's exactly why we haven't seen ethanol until late. E85 can't compete with $.79/gallon gasoline.

I wasn't even considering E85, given that it takes a special vehicle to use it.

What do you mean, "we haven't seen ethanol until late"? We went down this same road in the 80's! I just took out two ethanol storage tanks a year ago, and we closed our ethanol plant in South Point Ohio about 10 years ago for economic reasons. (we couldn't make money)

Maybe you should explain the $.79/gallon line, I haven't seen that for a few years.

But anyway, now suppose you own an oil company (or a bunch of stock in one) and you just spent $1.5M (that's Million) to be able to sell ethanol (10% or E85, whatever you wish) at one of your wholesale outlets.

Since the price of ethanol costs more than gasoline, and you'd lose money if you sold it over straight gasoline, how would you justify the expediture? Would you feel like you let your investors down?

[JasonA]

Sorry, when I say "ethanol", I really mean E85. I should have been more clear. I have no doubt you couldn't make money on ethanol a decade ago. Back then, we were paying .79/gallon for gas (at least I was, in southwest Virginia). A decade ago, flex fuel vehicles really were "special vehicles". Nowadays, many people are driving them without even knowing it.

$1.5 MILLION to be able sell ethanol at a retail facility. Wow. We're converting a tank here at no cost to us, thanks to a grant through NEVC. But the grant is $25k. Even the highest industry estimates for tank/dispenser conversion are in the $50k range...MAYBE $100k at the outside. If I spent over a mil to convert a tank, I really WOULD be getting over on my investors.

But thanks to government subsidies as you mention, the cost of E85 isn't higher than gasoline. It's often lower. It is around the corner in Southern Pines. They're selling it for about a dime/gallon cheaper than regular. Their E10 is about the same as midgrade as I recall. I didn't check their B20. All they sell is E10/E85/B20. The fueling contractor we will be getting here promises a 20% price difference (on average) between regular gasoline and E85.

[JasonA]

Since the price of ethanol costs more than gasoline, and you'd lose money if you sold it over straight gasoline, how would you justify the expediture? Would you feel like you let your investors down?

Timely, the news today that Exxon's chairman jets off with a $400 MILLION retirement bonus. I don't think "letting their investors down" ever crosses the mind. Letting SELF down, now that's to be taken seriously...

[keith_99_sts]

Ethanol, or any other so called alternative fuel, is pretty much doomed without government intervention. What is the true COST to Saudi Arabia to pump a barrel of oil? About $1.

Let's make up some numbers, just as an illustration. E85 is economical when oil goes over $50/barrel. The price is well over that now, so E85 looks like a smart investment. Over the next 5 years we have a massive energy program, the equivalent of the Manhattan Project, and convert 100% over to E85.

But now the price of a barrel of oil dropped to $25 because of the reduced demand for oil. Government will have to protect this great new E85 industry or it will implode with lots of unhappy investors and a depression in the economy.

Until there is an alternative fuel that costs $1/barrel, oil is king - or we simply decide to go in another direction and use the force of government to get us there. It can be done, but I really don't see the national will to do it. People are more interested in who Tom Cruise is using to download his next baby. As someone else reported, some new SUV's are flying off the lots so I'm not optimistic that there will a big consumer push for E85.

The politics of E85, and the massive power it confers to the chosen few, is it's best hope. It will be fun to watch this develop. I don't rule it out, because the profits are enormous. But it won't make it or survive if the markets are open. A shift in power from OPEC to Iowa isn't such a bad thing, but the necessary increase in US government power at home is a high price to pay too. There is no magic bullet solution to the energy needs of the world.

[JohnnyG]

$1.5 MILLION to be able sell ethanol at a retail facility. Wow.

I said WHOLESALE facility, whole different ballgame. Do you work for the government?

[JasonA]

No, I work for a private company at a military installation.

[JohnnyG]

How do THEY make money?

[JasonA]

Who? My company? We have a contract with the government for my services, and for the services of about 6 others here. We are not an energy company. Rather, we support the military installation's directorate of public works, more specifically, in the area of installation sustainability. We are currently facilitating our local AAFES (Army/Air Force Exchange Serivce, http://www.aafes.com/) getting E85, as is mandated by the government, through which, I've become a big supporter.

[JohnnyG]

So, they take MY money and spend it on something that makes poor economic sense. I think I see the problem.

[JasonA]

There are always tax inequities in the government. You can't let yourself get caught up in that. Part of your paycheck and mine go to support welfare programs, even though we may or may not agree with it, or have anyone in our family on welfare. If you own a house, you pay property taxes, and much of that goes to fund schools, even if you don't have any kids.

I prefer to focus on what I do believe in, and think is right, rather than the opposite, because it's easy to get spun up over something I may not believe in, and have no control over anyway.

[thu]

There's an interesting article on the economics of Ethanol as a fuel in the latest Car and Driver magazine. Patrick Bedard has made some interesting analyses.

Basically, he says that the amount of Ethanol scheduled to be produced in 2010 will displace only about 3.5% of petroleum-derived gasoline. Thus, he says, the price of oil won't be affected by U.S. ethanol production.

[JohnnyG]

There's an interesting article on the economics of Ethanol as a fuel in the latest Car and Driver magazine. Patrick Bedard has made some interesting analyses.

Basically, he says that the amount of Ethanol scheduled to be produced in 2010 will displace only about 3.5% of petroleum-derived gasoline. Thus, he says, the price of oil won't be affected by U.S. ethanol production.

Now this sounds about right, considering all of the facts that I have posted on this subject including the fact that the USA currently produces more ethanol than Brazil.

I prefer to focus on what I do believe in, and think is right, rather than the opposite, because it's easy to get spun up over something I may not believe in, and have no control over anyway.

And this sounds like bs.

[mikeal1892]

Must be nice to have all this money..... I could have a very large barn full of Cadillacs . Please Send Some ASAP !

Michael -

[JasonA]

Patrick Bedard is focusing on the government mandate of 5% ethanol content by volume, nothing more. That 5% mandate, by the way, is barely more than what's required now. So he's focusing on an increase that amounts to peanuts to dispell the promises of ethanol. Of course the price of gasoline or our reliance on foreign energy sources won't change because of it. He completely ignores (to the benefit of his article) true alternative fuels, like E85. Surprise, surprise.

JohnnyG, if you prefer to get wrapped around the axle by focusing on what the government does that you don't agree with, that's certainly your choice. But there's plenty of that to go around, so why dwell on it? Why live in negativity?

[thu]

Patrick Bedard has already addressed this issue in earlier issues of Car and Driver. This was a few months back and my memory is kinda hazy as to the exact point he was making.

I remember reading something to the effect in the article that there might not be enough aerable land to produce enough Ethanol from corn to replace the amount of gasoline we're consuming.

One trend I thought interesting throughout this nationwide discussion on supplies of oil is that the problem isn't we're running out of oil, but rather how much it costs. For the last few decades the discussion had been that the Earth is running out of oil to pump. Now, that discussion has been sidelined and all we're talking about is our out-of-pocket costs and how it will affect the national and global economy.

[JasonA]

I see the land issue the same as the scarcity of oil issue. That's right -- 30 years ago, the alarmists were crying that we'd run out of oil in 30 years. Today, somehow, we're still going to run out of oil -- in 30 years from NOW. It ain't gonna happen. A real interesting book on the topic is called "The Bottomless Well". Look it up on Amazon. It's an interesting read, and goes into many more topics than simply petroleum resources. It talks about the real value of efficiency (if there is any) and other deep energy discussions. Is there enough land to power our ENTIRE transportation sector on corn-based ethanol? Perhaps not. Is there enough land to fuel the current number of flex fuel vehicles on current refining technology? Enough people are saying yes for me to believe it. And as we move down the road with this, new methodologies for making this stuff will change a lot of variables in the discussion, as that situation has for countless products out there that weren't "economically-feasible" right up front.

Patrick Bedard wrote a lengthy article in the current issue of Car & Driver, and I agree with most everything he said, given his premise, that the government's recent incremental mandate won't do much of any good in the long run. Bump up the ethanol percentage a few points...will it save the world? Of course not. Bedard didn't do any real thinking for that article -- just restated the obvious.

The viewpoint of E85 supporters (which is real different from E5, which is essentially what the government mandate is) is not that it's the golden goose that will save the world; it's that it's something new that other nations have fully explored and that we have not, and that potential could be there. Could it work HERE in big numbers? No other country has as big of a transportation sector as we, so it's hard to say. There are people who emphatically say "YES", and people who just as emphatically say "NO". We'll see, down the road. It just requires an open mind.

By the way, it's amazing the difference in discussion, and position of opinions, on E85 that occurs on this site vs. that on another forum in which I actively participate, one for our Grand Caravan. The difference as I see it is this forum here is for non flex-fuel cars, and the other is for vehicles that ARE flex-fuel.

[Bruce Nunnally]

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here is a link to the book "The Bottomless Well".

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I for one would be happy if Cadillac would offer E85 engine flexibility, new low-emission turbo-diesels, true electric cars, or hybrid powerplants that added an electric kick for 50 hp when needed. More choices are better.

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I also would suggest that cylinder displacement systems allow the Driver the option of selecting engine modes manually as well as automatic selection. For example, when I am cruising steady state on the interstate for 2-3 hours I as the driver/planner know that the car should/could go into max fuel efficiency mode, and might choose to have it swap to reduced cylinder mode.

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I would also like to see 'max fuel efficiency' as an option on the cruise control selector, so that the car knows it can slow down going up hills and speed up going down to a wider lattitude than normally used for cruise control operation to preserve fuel.