EthanolAlley

Prices Surge

USA today had a piece on Ethanol spot market prices and how they've spiked.  Will Ethanol Plummet next year? 

If prices do plummet, I'd like to hear your ideas on what this will do to the overall state of Ethanol production/distribution in the U.S.

More Dollars Makes Sense

Read this post on the Converting Green to Green weblog, entitled "What So Wrong With Making A Profit?"

Anytime someone calls for the penalization or summary attachment of a "windfall tax" for energy companies and they've immediately lost credibility with me.  But this site and its author have clearly demonstrated that logic and basic economic principles shouldn't be messed with in times of clear economic advantage for the oil companies.  Although I don't believe that we'll run out of oil any time soon or that we're going to heat up the planet and kill ourselves if we don't go completely green by 2016 (please refer to articles circa 1970 where the "scientific community" was touting the coming of a new ice age)...I do think that the economics and attitude in America are right for this shift now.  It took economics and global politics to make this shift become real, just as it always does...and there's nothing wrong with that.  Oil companies may use the big profits they're reaping now to morph their businesses over the long term.  How long do you think it will be before the top 5 oil companies own and influence biofuel production? (They probably already do yet this author is simply ignorant of it).   

What's really interesting to me is listening to typical broadcast media types interview oil company leaders on TV.  The show hosts speak as though global warming is an absolute and that we're on the brink of death at any moment.  (Did they drive their own Mercedes S Class in to the studio today or did they opt for the Lincoln town car limo?  Do their estates run on solar, wind, and geothermal?  Somehow, I think not)  The oil company execs have really figured this thing out.  They agree in absolute terms that global warming is happening and that "they're spending $X billion on making oil cleaner."  Perfect.  How can you argue against this?  We make fossil fuel use cleaner, transition to XX % biofuel usage, and let the economics sort things out.  If oil drops to $30 a barrel and ethanol remains at say $3.00 per gallon...will you still ring the bio bell?  Ed Begley will, and he's about the only one that walks the talk.  As Al Gore what his jet fuel bill has been over the last 12 months.  My guess is that it would pay for all of my readers children's college educations...or is Al running the bio jet made from recycled hemp fibers these days?

Encouragement

For all of the normal poo poo about Ethanol not being sustainable if oil drops in price...please read this piece by Scot Lehigh of the Boston Globe.  It will bring things into perspective.

Transportation Conflagration

So capacity of Ethanol production is on the hockey stick growth curve but transportation is still the choke point.  To get the rail mode updated will cost billions and take years...and it's still a bet for those guys.  Spurs are being built out everywhere now but as we read in "Ethanol's Rail Jam"
there's still a 1.5 year backlog on tanker car production anyway.  We already know that ethanol wont get the luxury of a pipeline. 

Can someone provide Ethanol Alley with an average cost per gallon per mile to move ethanol via tanker truck? 

Since rail will NOT be able to keep up with demand, we must look at bringing another mode of transportation up that has virtually limitless infrastructure (roads). 

Talk About FLEX Fuel

Truly, flex fuel in its purest sense would mean "It burns just about anything you can give it".  A company in Iowa called Hydrogen Engine Center, Inc. have created an "industrial engine" that will bolt into various applications (kind of like CAT engines bolting into school buses, semis, etc.).  This engine will presently burn hydrogen, ethanol, natural gas, propane, or digester gas from landfills.  If we add electric/hybrid and bio-diesel to the mix...someone would have to create a new pricing software to calculate the best price alternative nation wide for all options at all times and deliver it to your inbox, cell phone, or via RSS feed.  Hummmmm.

The Basics

Here's a basic primer that you can share with anyone who's trying to get "This whole Ethanol thing".

Understanding Ethanol

IPO's a comin'

Will the upcoming IPO's of VeraSun, Hawkeye Holdings, and Aventine Renewable Energy Holdings be a boon or bust for the Ethanol industry?  If you read this piece on US NEWS & World Report, you don't really come away with a clear picture.  In the piece, the author says that, "Analysts warn that there is probably already plenty of ethanol supply coming to refiners."  What?  I guess while I was sleeping last night, the government rallied the National Guard to install E85 pumps at every gas station in the U.S.  If the author means that "For mixing blend purposes, there's enough supply," that could be true. 

Demographics and the future of Ethanol Alley

A must read piece appeared in 2 parts on Guy Kawasaki's blog .
I've linked you to the second part which discuss in more depth...where the growth in the US will likely take place.  What Dr. Joseph Chamie has to say about the heartland is quite alarming.  The only thing that will prevent his predictions from coming true...is the creation of Ethanol Alley right here in the Midwest.

"The population will also be more urbanized, with large movements to outlying suburbs and smaller cities, and significant regional shifts to states in the South and West. Over the next twenty five years, for example, the five fastest growing states are expected to be Nevada, Arizona, Florida, Texas, and Utah. In contrast, states in the Northeast and Midwest regions, such as North Dakota, West Virginia, Iowa, Ohio, New York, and Pennsylvania, are projected to experience negative or close to zero population growth over the next quarter century.

Momentum

I believe that Iowa still has the Ethanol momentum in its favor.  I've been connecting with more local Ethanol industry folks and associations and they're very upbeat but realistic.  They're not over hyping like used car salesmen.  That's a good sign.

I'm attending a conference in August that will be very informative.  More to come.