". . . ethanol production is exploding and supply is now greater than demand."
Oil prices have ethanol advocates smiling Joy Powell, Star Tribune April 2, 2005 http://www.startribune.com/stories/535/5325915.html Crude oil prices hit a record Friday of $57.27 a barrel, pumping up the hopes of Midwest ethanol supporters that their alternative fuel will become all the more advantageous to a fuel-hungry nation. "If you're looking at right now wholesale gas prices running 40 and 50 cents more than ethanol, then it stands to reason that the more ethanol you blend in, the less the final product should cost," said Ron Lamberty, market development director for the American Coalition for Ethanol, a trade group in Sioux Falls, S.D. At Minnesota's gas pumps -- where prices ranged from a low of $1.99 to a high of $2.29 Friday -- consumers are being hit hard in the wallet. Yet they might be hit even harder if they lived elsewhere, Lamberty said. That's because ethanol, which has dropped to relatively low prices, is helping to keep down the prices somewhat in the Twin Cities, say Lamberty and other ethanol supporters. Increasing gas prices In Minnesota, consumers buy a mandated blend of 10 percent ethanol and 90 percent petroleum, the only such law now in effect nationwide. They can also buy an 85 percent blend for flexible-fuel vehicles. Crude oil accounts for about half the cost of gasoline. Other factors include taxes, transportation and distribution. Now Gov. Tim Pawlenty and other ethanol advocates have more reason for increasing its use as a fuel extender. Friday's closing crude futures prices, adjusted for inflation in February 2005 dollars, were the highest in about 14¸ years. Though gasoline prices are high because of soaring crude oil, wholesale ethanol prices are low -- about $1.30 a gallon. That's because ethanol production is exploding and supply is now greater than demand. "There's still a lot of states that should be using it but aren't," said farmer Perry Meyer, president of the Heartland Corn Products ethanol plant in Winthrop. Lamberty reviewed fuel prices around the country Friday, examining the difference between prices charged for the key components in gasoline and retail prices. He found that ethanol blends were being marked up beyond what they should be in states such as Michigan. In Minnesota, however, fuel prices for ethanol blends are in line with the component prices, Lamberty said. "I think they're being fair," he said of refineries such as Flint Hills Resources in Rosemount. Minnesota consumers benefit from their law that calls for a single 10 percent ethanol standard for the whole state, Lamberty said, because refiners can make one grade of fuel using high-octane ethanol and a lower-octane base fuel, which costs a little less, he said. Companies turning more to renewable fuels include Minnetonka-based Cargill Inc., the third-largest producer of ethanol in the United States with 110 million gallons a year produced at plants in Blair, Neb., and Eddyville, Iowa. Aside from rising gasoline prices, the high crude oil prices are expected to raise costs for plastics and other products made from fossil fuels. At Cargill, a unique new form of plastic resin made from corn, under the trade name Natureworks, is being sold to companies that are using it to make deli food containers, clothing, blankets and more. _______________________________________________ Biofuel mailing list [EMAIL PROTECTED] http://wwia.org/mailman/listinfo/biofuel Biofuel at Journey to Forever: http://journeytoforever.org/biofuel.html Biofuel archives at Infoarchive.net (searchable): http://infoarchive.net/sgroup/biofuel/
