The Alabama Press-Register's headline: "State invests in ethanol, but results mixed." Invests? Mixed? You guessed it. "State agencies have doubled purchases this year of E85, an ethanol-gasoline mixture, citing its production from domestic sources and ever higher costs of conventional gasoline." In practice, "the state Department of Transportation paid more per gallon for E85 than it did for gasoline in five of the 10 months between May 2007 and March of 2008." So how much is this boondoggle costing Yellowhammer State taxpayers? "In March, E85 cost the department $2.64 a gallon, while gasoline cost $2.46. Despite the higher price, state records show DOT bought an additional 4,224 gallons of the mixture that month, an increase of nearly 40 percent." Even without the 40 percent increase, that's a $10k E85 surcharge for five months' corn juice. The executive director of the Alabama Clean Fuels Coalition blames… gas prices. "In order to get any product anywhere in this country, it takes a truck or engines," said Mark Bentley. "And currently, those engines are fueled by petrodiesel, which is currently tied to price of gasoline." Mr. Bentley called for Alabama-based E85 plants. So far, only one company has so proposed.
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There are plenty of Alabama-based ethanol operations. The revenooers just don’t know about them.
Why don’t they use one of the many midwest plants that are idle and not producing anything?
Gov. Bob Riley is an idiot in many, many ways. I wrote him when this plan first came up (as well as our Senators) to try and explain the insanity, financially.
The PR effect of “oil independence” won out, apparently.
I laugh every time that I see a vehicle driving around with that E85 badge. It was nice and typical green marketing.
BTW similar boondoggles prevail in all markets, not just ethanol. Industrial scale BioDiesel producers are provided with plenty of state & federal level incentives and subsidies. But since demand for BioDiesel is much higher in Europe than here in the US, most of their output is for export. Go figure.
I’m likely to be TTAC’s greatest proponent of BioDiesel, but I still don’t get how the government can waste my tax dollars supporting for-profit industries who are selling their product outside the country. It just doesn’t make financial sense.
–chuck
http://chuck.goolsbee.org
The (Alabama) State Motor Pool only uses the FFV Taurii and other GM E85 capable SUVs to haul the big-arsed Guvment Employees around at 85mph, so they can’t run biodiesel, only E85.
The funny thing is, the Alabama Highway Department (aka DOT) took a different, smarter path. They are beginning to burn biodiesel in their diesel trucks and heavy equipment. And there are a number of small biodiesel plants already in operation in Alabama so they are even buying it locally and actually saving money in the process. There was an article about it a few months ago, but of course good stories don’t get attention like bad ones.
And technically it’s the “Mobile Press-Register”. And I would be forced to leave the state if I didn’t get a “Roll Tide” in here somewhere…
In March 2008, gas in Alabama was $2.46?!?!!! Or is that a discounted price for state employees only? Damn you crimson tide.
Today, my corner gas station sells E85 priced at $2.76/gallon, while gasoline is $3.99 and diesel is $4.50.
Guess what? I see more and more folks lining up at the one pump that dispenses E85. I’d have to do the cost/mpg analysis, but that pump is looking better all the time.
Those ethanol operations Frank talks about in post #1 are undoubtedly a hell of a lot more profitable than the E85–and not subsidized, either.
It never ceases to amaze me that ethanol opponents can count every nickle and dime of ethanol subsidies but can’t add up the true cost of oil.
Imported oil costs billions in wealth leaving the country to go to supporters of terrorists. It costs lives and injuries in the wars for oil security. It costs billions more to pay for war in Iraq which is basically for oil.
Why do you think the auto industry is on the ropes? It’s because wealth is leaving the country to pay for expensive imported oil and wars for oil security. The country suffers because of oil and no one notices.
Peak Oil is here. Wake up to reality.
Um, corn needs to be moved by trucks, too. In fact, I can only assume ethanol is more energy dense than corn. So unless Alabama has a bunch of excess corn lying around, they’re going to be paying more to bring in the corn to make at their ethanol plants.
The prices are curious, though. Are those the prices of gas and ethanol without subsidies and taxes?
Raskolnikov
Nope, those must have been the fleet contract prices. We haven’t seen that price on the street in a couple of years.
rodster205
I understand there’s a big biodiesel refiner up in Huntsville…but the only place I’ve heard of an actual pump is at the Shell in Vestavia, Hwy 31 and I-65 (saw it in person!). Of course, it shares a pump with E85. It’s the “green pump,” naturally.
It never ceases to amaze me that ethanol proponents can’t see the amount of oil used in all stages of agricultural production and the connection between monetary cost and total energy consumption.
Now the maroons in the Canadian government decide to jump on the ethanol bandwagon. We don’t grow enough corn in Canada to make 2 billion gallons of ethanol.
http://ca.reuters.com/article/domesticNews/idCAN2739045520080528
Don’t forget it takes energy to refine crude into gasoline and move it to market. How does gasoline get to Alabama? Do they have a pipeline or does it come by truck and train? Even if they have a pipeline it gets moved from the terminal by truck.
ash78:
I’m certain there is at least one biodiesel plant in south Alabama (can’t remember where, but somewhere between Mobile and Evergreen) and I believe another is coming on line soon somewhere near Dothan, and several more are in the works. I believe they are using soybeans as the raw material. I need to go find that article…
Juniper:
Gasoline gets here by pipeline, mostly from Louisiana, and then is dispersed by truck to the pumps. The Birmingham area has several of the main pipelines running from Louisiana refineries to the Northeast, so there are several large gasoline “tank farms” around town where the tanker trucks roll from to your friendly neighborhood C-store.
I don’t believe there are ANY ethanol plants in Alabama, it is not a corn state. Any E85 here is being brought in from somewhere else, or being made from switchgrass or something other than corn. Actually Auburn University (the other Alabama university) is one of the leaders in research on these alternative sources of ethanol and biodiesel.