Not Logged In Log In   Sign Up   Points Leaders
Follow Us    8:22 PM

Message Forum - Read Message

Category: All Things Ethanol > Topics Add to favorite topics   Post new topicPost New Topic
Author Topic: Some ethanol plants cut out middleman to pass savings to drivers Back to Topics
gamechanger2011

Champion Author
Wichita

Posts:1,890
Points:72,110
Joined:Jun 2011
Message Posted: May 29, 2013 9:03:16 PM


“If Big Oil companies want to sell RINs to each other, stick the money in their pockets, and then use that as an excuse to raise gasoline prices, we can’t stop them,” Shaw said. “But we can expose the truth.Some ethanol plants cut out middleman to pass savings to drivers

[Edited by: gamechanger2011 at 5/29/2013 9:08:56 PM EST]
REPLIES (newest first) Post a Reply
Profile Pic
brerrabbitTX
Champion Author Houston

Posts:1,396
Points:24,765
Joined:Mar 2011
Message Posted: Jun 3, 2013 11:46:53 AM

The quality of the product is controlled in the same manner as gas. There are EPA rules, random state tests, and water monitoring equipment at each site. The reality is there would be no real risks associated with changing over to blending the e-85 at an ethanol distributor as opposed to a gas terminal.

If in fact there was any concern it would simply be the ethanol plant or distributors handling of the gas (the 15%) is something they have not done before, but realistically there should be no concern with it.
Profile Pic
gamechanger2011
Champion Author Wichita

Posts:1,890
Points:72,110
Joined:Jun 2011
Message Posted: Jun 3, 2013 11:35:08 AM

All fuel is tested by the state. They come by randomly and take samples to check octane levels, etc.
Profile Pic
Hannie59
All-Star Author Appleton

Posts:964
Points:24,300
Joined:Apr 2010
Message Posted: Jun 2, 2013 10:57:04 PM

All e85 must meet the same specifications borscht. Regardless of its where it is blended or who blends it. And the best e85 I ever used was from an ethanol plant when it was formerly sold in that manner here. It is a false claim that quality standards can only be achieved by oil company. Yes they have a monopoly on our fuel supply, but not on quality of e85.

[Edited by: Hannie59 at 6/2/2013 10:59:21 PM EST]
Profile Pic
SilverStreaker
Champion Author Twin Cities

Posts:14,069
Points:2,768,060
Joined:Mar 2006
Message Posted: Jun 2, 2013 7:31:57 PM

Just curious, why do the big oil shills like borsht spread rumors and allegations about ethanol, instead of providing any substantive proof?
Profile Pic
borsht
Champion Author Oakland

Posts:3,186
Points:754,945
Joined:Aug 2012
Message Posted: Jun 2, 2013 6:32:30 PM

Just curious:
Who is controlling the amount of water in the E85. E85 is pretty darn easy to water down. Do the gas inspectors test for water content at the stations?
Could you explain how the quality is going to be assured?
Pretty neat gimic to bypass the main distributers that have the quality controls.
Profile Pic
reb4
Champion Author Chicago

Posts:24,024
Points:2,398,100
Joined:Sep 2004
Message Posted: Jun 2, 2013 10:33:49 AM

"Also oil companies are responsible for the denaturing law that again drives prices up."

Goldseeker, please provide a link to back up your claim that the denaturing laws is the responsibility of oil companies... I don't believe you have your facts correct... You might want to view this link Ethyl Alcohol Handbook - Page 8 - The Law and Ethyl Alcohol

according to the link provided, all alcohol was taxed and the denaturing was to allow for industrial use:

"TAX-FREE ALCOHOL IN THE UNITED STATES
In 1897, a joint committee of Congress, investigating the importance of ethyl alcohol, reported its uses in industry as both "legitimate and necessary." The committee acknowledged that "there is scarcely a manufacturer in the country who does not use alcohol in the production of goods to a greater or lesser extent." This was the first of a series of reports and deliberations "

But please provide the facts as to why you believe the oil companies are responsible for the laws being in place...
Profile Pic
BigHorne1
Champion Author Missouri

Posts:3,678
Points:816,905
Joined:Jul 2012
Message Posted: Jun 2, 2013 8:18:30 AM

Even if this is true, the lost of mpg on your vehicle would not make up the difference.
Profile Pic
goldseeker
Champion Author West Virginia

Posts:22,860
Points:3,293,535
Joined:Sep 2005
Message Posted: Jun 2, 2013 6:22:21 AM

Also oil companies are responsible for the denaturing law that again drives prices up.

Ethanol companies in Brazil do not put up with such nonsense. In Brazil they sell hydrous ethanol. If we would do that in America ethanol would be 20-30 cents cheaper per gallon.
Profile Pic
goldseeker
Champion Author West Virginia

Posts:22,860
Points:3,293,535
Joined:Sep 2005
Message Posted: Jun 2, 2013 6:19:28 AM

Actually oil companies have done a pretty good job of killing off the competition. Case in point. A few years ago a ethanol company had 16 independent locations where they were selling e85 at a reasonable price. In fact they were under cutting gas prices considerably. Attorneys for oil companies discovered a quirk in the law that said that you could not undersell the competition by more than a certain percentage. Sooooooo, they filed a law suite against the ethanol company. In the end the case was settled out of court and the oil companies ended up buying the e85 pumps.......and to make a long story short, e85 prices went up quite a bit in that state. Now most of those pumps are closed.

Just goes to show that big oil cannot stand the competition.
Profile Pic
brerrabbitTX
Champion Author Houston

Posts:1,396
Points:24,765
Joined:Mar 2011
Message Posted: Jun 1, 2013 11:45:35 PM

Pocket lining aside there is in fact a current reality that RIN's whether you agree or disagree with the entire system have value in today's market place. As of the Nymex close on Friday RIN's were trading at 92 cents per gallon. That means if an ethanol plant cuts out the middle man and sells directly to stations then they are doing the actual blending of the gas and ethanol into E-85 and creating the RIN's. That means that for every gallon of E-85 they blend they can sell RIN's worth 78 cents.

Now according to the article Rack E-85 prices were at 2.69 a gallon and the companies mention in the article were selling e-85 for 2.17 or 52 cents a gallon cheaper than other racks. However the value of the RIN is 78 cents a gallon. So the ethanol plant put 52 cents on the street to consumers, and pocketed 26 cents for themselves. And that's fine, I have no problem with that because for all the noble reasons given to switch to ethanol people are in what ever business they are in (be it oil, ethanol, or anything else) to make money so I say good for the ethanol plant that is doing this. Keep in mind though to lower the cost of e-85 to the consumer and to pocket that additional 26 cents, they have to sell the RIN in the market place. And because of the RFA there is only one group of buyers who is forced to pay the price for RIN's and that is the refiners. So don't believe that ethanol is magically 60 or 70 cents or more cheaper than gas because of this.

This is as obvious as it gets that the RFA and it's call for RIN's regardless of whose idea it was at the time are turning into a form of subsidy for ethanol and will continue to grow if more and more ethanol plants install truck racks and blend their own e-85.

Again it is what it is, I'm not saying good or bad for either side, just making it clear how the system works. Ethanol has apparently figured some of the system out, so good for them.
Profile Pic
Hannie59
All-Star Author Appleton

Posts:964
Points:24,300
Joined:Apr 2010
Message Posted: Jun 1, 2013 2:02:57 PM

reb4, ummmm. What?

There is only one group that gets free money all the time in every possible form. OIL. Your beloved.

RINs may or may not be good, but the ethanol industry selling directly so their product costs less has nothing to do with RINs. Gas is not high because of RINs and you know it. Of course the liars are CLAIMING it but it's copletely void of fact.

reb4, I believe you want to use E-0 and like Shcky-Jock claim you are unable. However, WHY would you care if E-85 is cheaper than E-0? The relationship between unleaded and E-85 is not the same as this "mandate" that you guys always rail on. There is only one possible answer as to why you give two hoots about whether E-85 is cheaper than gas or by how much. And that is you want no renewable fuel to even exist.


[Edited by: Hannie59 at 6/1/2013 2:12:10 PM EST]
Profile Pic
reb4
Champion Author Chicago

Posts:24,024
Points:2,398,100
Joined:Sep 2004
Message Posted: Jun 1, 2013 1:55:12 PM

You summarized it nicely Brerabbit...

So all it is doing is lining their pockets...
Profile Pic
brerrabbitTX
Champion Author Houston

Posts:1,396
Points:24,765
Joined:Mar 2011
Message Posted: May 30, 2013 10:31:06 AM

It is a great program for ethanol and will aide it's growth in two ways. First it lowers the ethanol cost by putting the entire RIN value on the street for buyers of E-85 and secondly it increases the cost of gas to refiners because now the ethanol industry is creating RIN's that the refiners are required to have by law but are not generating themselves and forcing them to buy them from ethanol makers. So what they are doing is simultaniously lowering e-85 sales price while continuing to increase gas costs effectively growing the spread between the two fuels making e-85 much more attractive.
Profile Pic
Hannie59
All-Star Author Appleton

Posts:964
Points:24,300
Joined:Apr 2010
Message Posted: May 30, 2013 10:11:35 AM

This concept is going in some places, not others. It is EXCELLENT by the way. This is why you are seeing sub 50 cent spreads in some places and around a buck in other places. In my state there are a couple of places operating selling direct. Unfortuately none are around where I live.

Oil terminals are trying to control all E-85 sales. The fox guarding the hen house. That needs to be stopped and this is how.


[Edited by: Hannie59 at 5/30/2013 10:15:22 AM EST]
Profile Pic
SilverStreaker
Champion Author Twin Cities

Posts:14,069
Points:2,768,060
Joined:Mar 2006
Message Posted: May 30, 2013 9:55:24 AM

Bring on more ethanol! I save money every gallon I add to my tank!
Profile Pic
gamechanger2011
Champion Author Wichita

Posts:1,890
Points:72,110
Joined:Jun 2011
Message Posted: May 30, 2013 7:16:23 AM

Absolutely tropicalmn! This is going to get interesting! No pun intended.

[Edited by: gamechanger2011 at 5/30/2013 7:18:03 AM EST]
Profile Pic
tropicalmn
Veteran Author Minnesota

Posts:276
Points:253,320
Joined:Mar 2011
Message Posted: May 30, 2013 12:37:07 AM

Absolute Energy launches direct E85 distribution to retailers at $1.93 per gallon.According to OPIS, recent prices for E85 at Iowa terminals were about $2.77 per gallon, while Absolute Energy listed the price for its E85 at only $1.93 per gallon earlier this week.This should ignite new interest in E85!


[Edited by: tropicalmn at 5/30/2013 12:42:33 AM EST]
Profile Pic
WhiskeyBurner
Veteran Author Illinois

Posts:450
Points:15,855
Joined:May 2013
Message Posted: May 29, 2013 10:08:30 PM

If so, I hope they start moving East!
Profile Pic
gamechanger2011
Champion Author Wichita

Posts:1,890
Points:72,110
Joined:Jun 2011
Message Posted: May 29, 2013 9:58:49 PM

whiskeyburner...I think the Propel stations in California are set up like that. It's a great concept!
Profile Pic
WhiskeyBurner
Veteran Author Illinois

Posts:450
Points:15,855
Joined:May 2013
Message Posted: May 29, 2013 9:42:31 PM

I've kinda thought it would be nice if somebody could cook up an alternative energy "gas" station and bypass the typical venues.

Set it up with blender pumps for different Ethanol blends, BioDiesel pumps (is it possible got get "blender" versions of that too?), and maybe some sort of charging station for plug in hybrids and electric vehicles.
Profile Pic
gamechanger2011
Champion Author Wichita

Posts:1,890
Points:72,110
Joined:Jun 2011
Message Posted: May 29, 2013 9:09:32 PM


"Recent OPIS prices for E85 at Iowa terminals were $2.69 a gallon, IRFA pointed out, while at the same time SELC listed its E85 at $2.17 a gallon. “Here at Siouxland Energy, we’re passing on the RIN savings to the consumer, and it’s making for some very attractive E85 prices,”
Post a reply Back to Topics