Why does Ethanol additives cause gas prices to rise?

[John Geyer]

I would assume that ethanol, being produced by fermenting American grown corn into a useable fuel, would make gas cheaper, not more expensive. Instead of making the price of gas rise, I would believe that it would fall because we are using a renewable, home grown form of fuel. I guess I'm an idiot for not understanding the reasons behind this, but I ask for someone with more experience to explain it for me. I was telling my father how ethanol would make gas cheaper, and now I feel like a complete moron. Help me understand.

[KarlInOhio]

Other problems is that ethanol loves to mix with water (hydrophilic), unlike gasoline. Therefore it is harder to handle and ship. If you mix some water in with gasoline, they will naturally separate. To get water out of alcohol you have to redistill it.

Next, I don't think anyone has built ethanol pipelines yet, so ethanol has to be trucked to where it is used which costs more than just piping it.

Finally, anytime you change what goes into gasoline, refineries and shipping points have be shut down to handle the change over. Since refineries are running at close to 100% of their rated capacity already, there isn't any capacity to pick up the slack during changeover. That causes price increases and shortages.

[TFMcGuire]

It also isn't cheaper when you consider it knocks mi/gal down by about 25%.

[Red6]

Refining.

You can't stick corn cobs in your engine can you?

[Brilliant]

Why would making something here necessarily make it cheaper?

[sarasota]

See #17.

[sarasota]

I didn't know this. Got a link to a source?

[ARealMothersSonForever]

http://www.freerepublic.com/focus/f-news/1617340/posts
A keyword search on E85 and ETHANOL will give you scads of FReeper wisdom. The big thing is converting from MTBE, which was not water soluble and noncorrosive, to Ethanol; which absorbs water and becomes contaminated very easily, and is corrosive. Ethanol manufacturing is currently government subsidized. Some argue about that being good, bad or indifferent. It just is. Storage tanks must be cleaned and dessicated before delivering ethanol blends. Pump filters must be replaced, to prevent contamination. All of this costs money, and disrupts supply. Thus impacting cost.

[tiger63]

You are exactly right! This material can never be supplied by pipe line without a complete overhaul.

It sucks up every bit of moisture around, you will have to add a water dispersal agent to your tank every time you fill up.

Use this stuff in an older car the seals, gaskets and your rubber fuel lines go south. The "in tank" fuel filter is the first thing to go as the injection system becomes clogged. Your auto shop will love this!

No logical thought has gone into what will happen..Whats new?

[Trust but Verify]

John,

The price of a gallon of ethanol is higher than the price of a gallon of gasoline. If you replace 1/10% os a gallon of gas with ethanol, you are adding a higher-priced product, which raises the price of the gasoline.

E85 gas is actually cheaper than regular unleaded gasoline right not, but that is due to a government subsidy which I understand is about $.50/gallon.

[Wally_Kalbacken]

The price of ethanol would logically be higher further from where it it produced due to logistical costs of transport from where it is made (primarily the Midwest). No matter where it is sold, no matter the purchase price - ethanol production is subsidized by a tax credit to producers of 50 cents a gallon. So, from general revenues to ethanol producers - courtesy of Senators and Representatives from the Midwest, whether you use ethanol blend fuels or not - you're paying for them.

[Old Professer]

Very good synopsis, grasshopper.

[TFMcGuire]

I am not sure which fact is being researched. Google it and if you can't find it, I'll get the link for you.

TMc.

[Al Gator]

John,

Ask yourself this:

How many gallons of gas does it take to farm the acreage needed to produce the number of bushels of corn needed to be be refined into a gallon of ethanol.

Now, add that to the amount of fuel needed to fire the still to refine the brew to a level of alcohol that it can be used as fuel.

It takes about 5 gallons of brew to get to about 1 gallon of usable ethanol.

Ethanol aint cheep!

[newgeezer]

It also isn't cheaper when you consider it knocks mi/gal down by about 25%.

If you're talking about a 10% ethanol blend, 25% sounds awfully high.

EPA MPG estimates for E85 (85% ethanol + 15% gasoline) in flexible-fuel vehicles is typically 30% less than for gasoline. Also, ethanol has 30% less BTU (energy) than gasoline.

So, theoretically, if all else is equal, a 10% ethanol-blend should result in a MPG penalty of less than 5% when compared to straight gasoline.

At any rate, a 25% penalty from a 10% blend doesn't sound right to me.

[Ditto]

Why would making something here necessarily make it cheaper?

Transportation costs.

[waverna]

Isn't it simply that the wholesale price of ethanol is higher than the wholesale price of gasoline? So when you add it to gasoline the price increases.

Everyone is taking for granted that ethanol must be cheap, which is not the case.

[Herakles]

let me do a calculation that may not be exactly correct;

1 gallon of gas = $ 3.00

1 US gallons = 3.7854118 liters; so

3.7854118 liters = $3.00

At the liquor store, 1.5 liters of vodka (assume 100 proof potato ethanol) = $11.00

Replacing 15% of gas with ethanol;

.85(3.7854118 liters = $3.00) = 3.22 liters = $2.55

3.7854118 - 3.22 = .57

(.57/1.5)11.00 = $4.18

so gas with 15% vodka should cost $2.55 + $4.18 = $6.73

which is why we do not use vodka to fuel our cars; however this points out an important fact; if ethanol were the price of gas or less we would have been using it long ago, but it is nowhere near that so when it is added, the price of gas will go up.

[Gorjus]

You get more out of ethanol than you put in, . .

Only if you farm the original corn using mules instead of tractors. There was a recent article posted from Popular Mechanics, and it discussed the refining cost only (energy cost) and did indeed show a small, but net energy gain. However, if you add in the fuel required to plant, cultivate, and pick the corn, you end up with a net loss of energy.

[ARealMothersSonForever]

Thanks. I am still waiting for congresscritters to demand that "big, mean, profitable oil" give their pipelines to the ethanol producers for cost. Just like judge Green did with telecommunication pipelines. When most of the vehicles on the road become inoperable due to contamination, congress can simply pass another law to force mean old oil to pay for the repairs. Yeah, that's the ticket. (shaking my head in amazement and checking corn and sorghum futures...)

[TFMcGuire]

difference in the energy of the ethyl alcohol molecure as compared with the assorted HC molecules which make up the gasoline mixture.

E-85 would produce the "desired" resuts.

Although, emprically, it does "seem" like 10% C2H5OH knocks mileage of my 2001 Silverado down at least 10% as well.