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dan45mcc

Ethanol Pipelines.. NOT a Good Idea

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Growth Energy continues to push for ethanol pipelines to to move corn ethanol from the Midwest to States outside the Midwest.

 

This is wrong on so many levels but we really need to look at just a few points:

 

Costs: An Ethanol Pipeline does nothing more than adds another Middle Man between produced ethanol and the consumer, the costs of these pipelines will be borne by the consumer and taxpayers.

 

Market Monopoly  The entire purpose of an corn ethanol pipeline is nothing more than a way for corn ethanol to try and control the ethanol market and block the advancement of REGIONAL cellulosic ethanol (not that you cant blame them for trying..)

 

Corn Ethanol is limited by Law to 15 Billion Gallons-  With Corn Ethanol Production already well past 11 Billion gallons ..there isn't any sense in adding a pipeline for the sake of an additional transport of 4 billion gallons.

 

 

 

Regional  Feedstock for Cellulosic Ethanol using hub and spoke distribution allows far less expensive distribution and excludes any further middle men..which in turn keeps the end retail product at a  lower cost for consumers.

 

 

Regional Ethanol Production is the key to lower cost ethanol that can directly compete with oils gasoline products ..Not building Middle Man toll gate Pipelines transporting ethanol thousands of miles for the benefit of a few

 

 

It is clear that ethanol production is expanding all across the United States ..not just the Midwest ..

 

ethanol-plants.PNG

(source RFA)

 

 

This expansion of regional Ethanol Production (whether it be corn or advanced feedstock production) should and will continue as long as those trying to control the entire ethanol Market are prevented from building Middle Man Ethanol Pipelines that are designed to line the pockets of a few in the quest of Market domination.

 

 

 

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oops....  answered my own question :-[

 

was not aware that there was any limit to the production of CORN  (conventional) ethanol production... I was under the impression that this was a supply/demand thing, and that the only limit was the consumer's demand.  If people don't demand it, producers won't produce it...  silly me :-[

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dan,

 

some very good points, but how is ethanol limited to 15b gallons?  I'm not quite following you.  Sorry if I missed something... :-[

 

The Renewable Fuels Standards that are in the National Energy And Security Act ..  36 Billion Gallons by 2022.. Corn Ethanol is capped at 15 Billion Gallons starting in 2015.. http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=110_cong_public_laws&docid=f:publ140.110.pdf

 

 

The entire purpose being to "push" advanced ethanol production(cellulose) ..corn ethanol has always been considered the fastest way to build a volume BASE for ethanol while developing out cellulosic ethanol.

 

Some want to change the law to allow for more corn ethanol..

 

 

I am saying leave the law as is ..if we allow corn ethanol more than cellulose ethanol goes further  to the backburner.. cellulose ethanol plants are just starting to fire up.

 

The ethanol Pipeline Lobby is coming form Corn Ethanol that wants the do away with the 15 Billion Corn ethanol cap and wants to control as much of the ethanol market as possible..

 

 

I believe we need to continue on expanding regional ethanol production..that allows for diverse feedstocks (corn , switchgrass , wood chips, garbage  industrial waste ,algae etc..) ..promote a local hub and spoke distribution .. Local Ethanol Plants delivering their ethanol products right  the Retail Stations (blender pumps) .

 

I believe ethanol pipelines coming out of the Midwest makes little sense when Corn Ethanol is already by law restricted to 15 billion gallons..

 

They are pushing not only for the pipelines but a lifting of the 15 billion gallons..

it is simply my opinion that all that would do is stifle regional ethanol production and hold consumers down with another Monopoly situation.. How would you like to live in California for example and be beholding to who ever has the shut off valve on the ethanol pipelines?

 

 

And you just KNOW Ethanol Lobby will screw it up.how long to you think it would be before Oil Owned the Keys to any centralized Oil Pipeline?

 

Local Ethanol Production with local feedstock and local distribution is the correct path .. keep it as diverse as possible that's the way to keep Oil or any other centralized entity from controlling all of Ethanol

 

 

 

 

 

 

 

 

 

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I understand...

 

agree, cellulose ethanol, with the hub/spoke local production for local distribution is by far the future of the fuel.

 

I would hate for the industry to stall out though because there is a demand for the fuel, but the limit on corn ethanol combined with the lack of production of cellulose ethanol... the industry is unable to meet the demand...

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You make some good points, Dan, but I think I gotta come down in favor of the pipeline.  The rails were really robbing the ethanol guys before the downturn, and, likely, will again. 

 

Also, eventually, the tariff on Brazilian ethanol will come off, and if the cellulosic isn't ubiquitous at that point, the corn guys will need all the help they can get to keep the Brazilian stuff beat down, especially on the Coasts.

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My understanding pipeline the cheapest transport, also. Railroad the second, but not close to being comparable. We need as much of this stuff as we produce. Right?

 

Second and third generation ethanol should not fear corn ethanol. In fact they should stand up and cheer. Push the fuel, break down barriers, enable manufacturers and consumers a chance to experience and experiment with ethanol and adjust to change.  All of this positions cellulosic to expand and be accepted quicker.  Pipelines would assist in distribution and access. Don't forget the current ethanol producers will be in the mix. Current processors can accommodate and adjust to bio cellulose production. Meaning to up production with variety of feed stocks including cellulosic.

 

Eastern sea board has a lot of customers and not much land.  Cellulose takes a heap of land and tonnage of crop. Third generation has a big potential to max production with minimal land....but that is based on companies best case salesmen scenario. Meaning I've been with to many companies projecting wild fantasies to believe much of the company promotions.  It would indeed be a great breakthrough if only one of those wild projections were realized. Don't hold your breath, history, reality,  and facts a stubborn thing. If upon real life production and cost they achieve what they promote? Well katie bar the door as oil will take a licken. 

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An ethanol pipeline is not restrained to only CORN ethanol.  Cellulosic, waste, and garbage ethanol can certainly flow through those lines.

 

And even if it is corn ethanol mostly flowing to the East, that still leaves the Midwest cellulosic/waste/garbage ethanol to be used by Midwesterns, while they export a product (and import dollars) to the East.  That means more Midwestern jobs.

 

Most of the ethanol is made in the Midwest, and a cheaper long-term solution that doesn't rely on diesel trucks and trains to move it is preferable.

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I disagree, They ship petroleum by pipeline for a reason --- it is the most cost effective way to move bulk liquids. Same applies to ethanol and ethanol compatible products. There should be at least a few "back bone" ethanol pipelines. It will allow fuel sharing when stocks are low in one area, and help hold prices down for all, as buyers/suppliers can move supplies to satisfy local needs, and take advantage of more efficient producers cost savings.

 

Larry

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