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Author Topic: What if ethanol were removed? Back to Topics
rick_evans

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Boston

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Message Posted: Mar 11, 2013 8:35:48 AM


At present regular fuel is comprised of 90% refined gasoline and 10% ethanol. Per gallon ethanol contains ~70% the energy content of gasoline. Presumably we would gain 100%/97% or about 3% more miles per gallon with pure gasoline. However we would also have lost 10% of a fuel supply that would have to be made up by 11% more gasoline to travel that 3% farther. Assuming demand is close to matching supply we would need 11% more gasoline.

At present, even without subsidies, ethanol is cheaper than pure gasoline. At the one station near me E85 is 3.39 and E10 is 3.55. Solve simultaneous linear equations for the E100(pure ethanol) and for E0(pure regular) and the ethanol price is 3.36 vs 3.57 for gasoline. But that assumes magically replacing the 10% ethanol with pure gasoline.

Remove ethanol and you give speculators a ready excuse for a price spike that last quite some time. Personally, I'm agnostic on the use of ethanol. Regardless how you feel about using ethanol as an oxygenator be careful what you wish for.
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SoylentGrain
Champion Author Illinois

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Message Posted: Mar 18, 2013 12:14:59 PM

" Don't know how that math works well for the tax payers over 10 years?"

That's an easy one to figure out.

At a ethanol wholesale price of $2/gallon, a 200 million gallon facility sells $400 million of product annually. Nice chunk of change to work with.

The cost to feed 100 workers at $40,000 a year is $4 million in pay to those folks.

Let's assume that the board of directors is demanding their plant makes a profit. Even if the plant was marginally productive, it should generate an ROI of 6%. That means of the $232 million investment, $14 million would be profit.

sounds great for the ethanol plant and workers. But, here's where the state and federal government come out ahead. That profit and income is taxed. The state and federal government take 50% in income and Obamacare taxes. That means of the $14 million profit $7 million goes to the government. In addition, if the workers are taxed at 10%, another $400,000 goes to the government.

Let's see how well the government is coming out on this one. The government "invested" $50 million in this operation (21.5% of $232 million. (which they didn't. that taxpayer subsidy was mostly a loan). Each year the government is taking in $7,400,000 in taxes. $7.4 million/$50 million = 15%. Damn good return for the government.

Don't worry about the government. They are doing OK on this one. In all likelihood, the government is making more than the ethanol plants.

[Edited by: SoylentGrain at 3/18/2013 12:17:12 PM EST]
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webncrb
Champion Author Maryland

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Message Posted: Mar 15, 2013 2:21:51 AM

"What if ethanol were removed? " I'd have a party and celebrate.
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tdioiler
Champion Author Detroit

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Message Posted: Mar 14, 2013 9:59:26 PM

A bunch of lobbyist would be out of work.

I wonder how many additional jobs are really added by ethanol? Exclude the farmers and shippers since they will grow and ship something else. There are four plants in MI in know have just over 200M/gals/yr in production for 100 people. But one specific plan was funded by Feds and state for 21.5% of $232M invested. So that's $500,000 invested PER worker. Don't know how that math works well for the tax payers over 10 years? Cheaper for unemployment that that waste.
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tomtom08
All-Star Author Providence

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Message Posted: Mar 14, 2013 4:57:15 PM

only good thing to about ethanol is that it created jobs, by adding ethanol to gas. besides that its not worth sh_t
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RedRider1OK
All-Star Author Oklahoma City

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Message Posted: Mar 13, 2013 11:16:30 PM

Another reason the RFS, RINs and the ethanol mandate should go away.

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krzysiek_ck
Champion Author Illinois

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Message Posted: Mar 13, 2013 10:01:41 PM

Big Oil Greed blaming ethanol for high gas prices, how original.

Also, "The ethanol industry argues that the oil industry is driving up gasoline prices and the prices of ethanol credits, or Renewable Identification Numbers (RINs)."

[Edited by: krzysiek_ck at 3/13/2013 10:03:41 PM EST]
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RedRider1OK
All-Star Author Oklahoma City

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Message Posted: Mar 13, 2013 8:06:56 PM

Get rid of the ethanol mandate, the Renewable Fuel Standard and Gasoline will be cheaper. Here's more about why the RFS and the ethanol mandate is raising gas prices.

"If producers fail to reach government targets for ethanol, they must buy the increasingly expensive credits, and that cost is leading to higher fuel prices."
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goldseeker
Champion Author West Virginia

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Message Posted: Mar 13, 2013 3:08:22 AM

" Eliminate the ethanol mandate and fuel prices drop!" Some folks in here just do not have a clue.
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jacksfan
Champion Author Lincoln

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Message Posted: Mar 12, 2013 11:43:07 AM

"Corn is for food...not fuel... Price is not the only issue particularly in a world in which most people have little to eat."

And for most of those people who have little to eat, it because of politics, not because there isn't enough food. There's plenty of corn to meet all needs.
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ggg452
Champion Author Manitoba

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Message Posted: Mar 12, 2013 10:43:26 AM

Corn is for food...not fuel... Price is not the only issue particularly in a world in which most people have little to eat.
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RedRider1OK
All-Star Author Oklahoma City

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Message Posted: Mar 12, 2013 10:13:26 AM

Gasoline would be MUCH cheaper because Refiners would not have to increase their prices to cover the purchase of RINs to make up for the ethanol that they are not selling to meet the federal mandate. The blend wall is here and the refiners are being penalized for not selling more than 10% ethanol in their mix. Eliminate the ethanol mandate and fuel prices drop!

Link for the latest RINs article here:

[Edited by: RedRider1OK at 3/12/2013 10:14:10 AM EST]
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SilverStreaker
Champion Author Twin Cities

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Message Posted: Mar 12, 2013 10:02:41 AM

BigHorne1, is it possible for you to back up any of your statements with a verifiable link? I doubt it.
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BigHorne1
Champion Author Missouri

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Message Posted: Mar 12, 2013 9:02:08 AM

Consumers would see a drop in their food prices, and gasoline prices. Since refineries say the ethanol is the reason gasoline prices are higher in the summer months.
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rumbleseat
Champion Author Winnipeg

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Message Posted: Mar 12, 2013 4:02:27 AM

RedRider10K says: "The following would go down:
Fuel prices
Corn and other farm grown commodity prices
All corn related food product prices"

Um, no, the demand for fossil fuel products would go up to make up for the ethanol that wasn't there, we already see what happens when refineries shut down for maintenance, would the removal of ethanol magically cause refineries to put out more gasoline and never need maintenance?
Corn would drop temporarily, then would shoot up when hundreds of thousands of acres of corn production were taken out by farmers switching to something else they could sell. They aren't in the business of producing gluts.
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RedRider1OK
All-Star Author Oklahoma City

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Message Posted: Mar 11, 2013 11:59:50 PM

The following would go down:

Fuel prices
Corn and other farm grown commodity prices
All corn related food product prices
Fuel and maintenance cost per mile
Small engine sales
Farmers income
Mechanics income
Sales of replacement carburetors, fuel lines, fuel tanks, fuel filters
Sales of fuel additives to protect against ethanol problems

Will ethanol ever be removed? Probably not, it's a stimulus for the economy at the cost of the consumer. Keep the ethanol mandate and tell our Govt. that you want more ethanol.
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krzysiek_ck
Champion Author Illinois

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Message Posted: Mar 11, 2013 4:20:02 PM

blckwolf wrote: "While you do burn less carbon per piston stroke, you actually have to burn more to go the same distance that gasoline only provides, because you lose power by adding ethanol to the mix."

I gain 100 rwhp by using E35 in a turbo car. To achieve the same gains from "straight" gas I would have to use racing gas. How exactly do you lose power by adding ethanol? At the same time, crusing MPG is same between E10 and E35 which was achieved by leaner A/F and more advanced timing. Are you 100% positive that OEM ECUs are not able to adjust in the similar way?

[Edited by: krzysiek_ck at 3/11/2013 4:21:44 PM EST]
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rick_evans
Champion Author Boston

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Message Posted: Mar 11, 2013 1:56:54 PM

" Additionally, the math you used is flawed, ..."

How is the math flawed? A 90:10 blend of gasoline and ethanol has 97% of the energy content or 3% less kcal than does 100% gasoline because ethanol has 70% of the energy content of gasoline. Are you asserting that a car that gets 15 mpg will get 17 to 18 mpg(13% to 20%) with gasoline while a car that gets 40 mpg will get 42 to 43 mpg(5% to 8%) ? That's what your 2 to 3 mpg claim implies. For both to show the same change in mpg doesn't make much sense.
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blckwolf
All-Star Author North Carolina

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Message Posted: Mar 11, 2013 12:30:37 PM

Actually, the mileage you would get from pure gasoline more than makes up for the loss of the ethanol. When an engine can run on pure gasoline, it uses less gas for combustion to achieve the same effect that a gas/ethanol blend uses. Additionally, the math you used is flawed, but logical. Your actual mileage from using pure gasoline will increase by 2-3 MPG! If you get 20 MPG, that's more like a 10-15% increase in fuel economy. If you don't believe me, find a pure gasoline station and fill up with pure gas (you should do this with your tank almost empty).

The government claim that ethanol somehow saves the environment is also flawed. While you do burn less carbon per piston stroke, you actually have to burn more to go the same distance that gasoline only provides, because you lose power by adding ethanol to the mix.

While I won't go into all the "additional" and "real" reasons the government wants to mandate gasoline/ethanol blends, ethanol is not the answer the government would have you believe.
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