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dan45mcc

Ethanol just 3 cents less than Gasoline ..Sticker shock coming soon

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pure and simple market manipulation... fueled by tax incentive opportunism... 

 

I like how in Brazil, when they have a rise in the price of ethanol (due to either demand out stripping supply, or supply not meeting demand...) they lower their "base fuel" (gas) from 25% to 20% ethanol...

 

Helps keep their "alternative" fuel (e85 and hydrous ethanol) competitive against gas.  They see petroleum alternatives as a national priority. Sort of enlightening...

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Make no Mistake People are listening...

 

 

 

 

"But in the complicated world of ethanol, even the strategy to expand blender pumps could unintentionally jeopardize the future of midlevel blends. Phil Lampert, an ethanol consultant who has spent more than a decade focusing on E85 expansion, says the Senate agreement to remove the Volumetric Ethanol Excise Tax Credit could result in the demise of E85 and blender pumps. Under the current 45-cent VEETC, E85 can be sold at a 15 to 20 percent discount to regular unleaded gasoline, which compensates for the loss of mileage experienced when using the fuel. Without that credit, retailers will not be able to sell E85 at a reduced price and motorists will be forced to pay the same price for a fuel that gets fewer miles per gallon. “If we’re not able to price E85 correctly, very few people are going to be willing to take a loss of mileage for the same price,” he says. “We’re fearful that if the price is higher or the same, and people are losing mileage, they’ll buy it one time and won’t be back.” This drop off in demand could have devastating effects on retail ethanol infrastructure. Lampert predicts that less than 25 percent of the approximately 2,400 existing E85 pumps will still be operating six months after VEETC is eliminated. And if E85 pumps are closing, why would any retailer consider adding a new E85 pump or invest in the installation of blender pumps? Yes, the compromise to repeal VEETC includes incentives to alleviate the financial commitment for blender pump installation, but expanding ethanol availability is only one part of increasing consumption. “It’s not just build it and they will come. It’s build it and price it correctly and they will come,” he says. If it’s not priced right, it won’t sell. And if it doesn’t sell, retailers are certainly not going to be swayed to install more pumps simply because they can do it at a discount.Lampert admits that E85 is still a very small portion of the overall ethanol industry. Approximately 120 million gallons of E85 are expected to be sold this year—less than 1 percent of overall ethanol sales. “But there’s no blend wall for E85,” he adds. “If we had the infrastructure out there and we had it priced correctly, we could sell 3, 4, 5 billion gallons of E85 to the existing flexible-fuel vehicles.” In his conversations with retailers, Lampert says he’s not convinced that many will offer E15 when they are finally able to. And without E15, the next option to increase ethanol’s market share is through midlevel and higher blends for FFVs. “I think we’ve got to refocus our effort to accommodate E30 and E85,” he says.

One way to correct the loss of tax incentives from VEETC could be to modify another existing section of the tax code that allows for a 50-cent-per-gallon credit for alternative fuels, Lampert says. That credit applies to such fuels as propane and hydrogen but not E85, which is currently classified as a gasoline additive, not as an alternative fuel. But Lampert and a group of E85 retailers are working to change that and to extend the credit, which is currently set to expire at the end of this year.

 

 

 

 

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That credit applies to such fuels as propane and hydrogen but not E85, which is currently classified as a gasoline additive, not as an alternative fuel..

 

 

 

 

There you go..right there that is the problem.. That is what I struggle with daily trying to get through peoples thick skulls.. 

 

 

E85 is an Alternative Fuel.. no one is required to use it

 

 

E10 is an additive that is mandated into most everyone's gasoline

 

 

 

 

 

 

Changing E85's classification to what it should be is a step in the right direction .. but the larger issue remains.. we are using far to much corn for ethanol as an additive..that is why the price of corn is so high.. we are producing 1.4 BILLION gallons more than required by all..all out of greed 

 

 

Pull back the price of corn by reducing the Renewable Fuel Standards Limit a few billion gallons..(at leats until yields increase and or until cellulosic is able to contribute real volume) do that corn starch ethanol whether as an additive or used as a alternative fuel would not need any "subsidies" tax credits  how ever you want to word it

 

 

Of course ethanol Industry wont say the obvious.. that's

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I'm big into "state's rights" and local government...

 

I'd like to see states take the lead in their own fuel legislation...

 

Utah, they are big on CNG...  let them take the lead on developing the most extensive CNG refueling network.  It works well for them.  Go for it!

 

Minnesota, Iowa and Nebraska... they produce a lot of ethanol.  THEY (not Washington DC) should be making state regulations that encourage the building of infrastructure to ween their states off of petroleum.    Time to get that email sent off to my state legislator (unicameral here in NE)... to this regards.

 

E85 is a realistic, clean, domestic alternative that is here now, and usable. 

 

Personally I don't care if EVERY state has e85, and the PRK (People's Republic of Kalifornia) are insistent on their "CARB" "indirect land use" formulas... to torpedo ethanol...  fine, let them breath their own polluted air... 

 

All of you, please start urging your state governments to start pushing alternative fuels in the state.  Trust me... DC will find a way to screw this up, how long it takes, or how bad they do it... those are the questions, but the results are pretty much obvious.

 

The people, and the states need to take the lead here!  (OK, enough, I'm off my political soap box, and my lunch break is almost over...)

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Thanks to the insane gas prices in NY the price spread has remained at pretty decent at the one station close by that has it. They want something like $3.29 vs. $3.75 for their regular gas, and technically their gas is cheap anyway most places are $3.80 or higher. However if I drive a few miles to the reservation then they've got tax free gas for $3.34. Obviously the gas milage is gonna be better at $3.34 than it is on the $3.29 E85, but it more inconvenient to drive there.

 

Ethanol fuels should be taxed on the basis of its gas content, not as gas itself.

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Ethanol fuels should be taxed on the basis of its gas content, not as gas itself.

 

interesting proposal...  I've heard of taxing in on "BTU content"...  but the "gas content" sound even better... for me, and for encouraging it's use...  could be popular here in Nebraska! ;)

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Here in NY both are taxed something in the arena of 50 cents a gallon. Even if prices were dead even but E85 was taxed only on its 15% gas content it would equate to a 42 cent savings or so per gallon. State by state savings would vary but most states probably have in the realm of 20 cents a gallon tax so there would always be a 15 cent spread at a minimum as long as prices don't climb higher for ethanol than gas.

 

This would create a perfect reduction across the blender pumps, everything getting cheaper with its increasing ethanol content.

 

I highly doubt many people really care about anything than the bottom line cost at the pump. If E85 ran in a person's car and the cost was cheap they'd buy it, because in terms of relative performance when driving there isn't really any difference other than the gas milage.

 

Most of the people I see filling up with E85 are not flex fuel Tauruses which are a dime a dozen but big gas guzzling trucks and SUVs that just happen to be flex fuel and the immediate savings at the time of fillup of that 40 gallons they take to fill up is $20 at the going rate. Granted the real savings if any is less but its that up front $20 that people see. Trust me it is psychologically convincing to see your usual $50 fillup become $44 even though you're technically not saving that much.

 

The only person I ever saw buying it for any other reason explained to me he bought it because his friend worked repairing the Thruway patrol Crown Vics and they'd have next to no deposits on the engines when they were torn down for repairs.

 

I still think if gasoline taxes were waived for the ethanol portion of the product at fillup, subsidies would not be needed but would still transition people to E85 for the cost savings. I'm sure people would buy it just based on the fact they didn't have to pay as much tax, because as we know everyone hates taxes. Perhaps that is a bigger incentive for more people aside from environmental benefits and a renewable fuel. As I mentioned before I doubt many of the buyers are considering anything other than that immediate savings at the pump. For every person educated on the matter there are probably 5 that are just buying it because its cheap and runs in their vehicle.

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very true...

 

Here in the "cornhusker state"... we get a lot of "regional pride"...  many people if they are not farmers, either grew up on a farm (me) or their parents grew up on a farm, or they have an uncle/cousin/nephew... that farms... you get the "I'd rather support Nebraska Farmers then texas/saudi oil men/OPEC"... type of rationale for e85... (which I 100% agree with)

 

As for performance... I disagree.  When I used gas in my mini-van (the one trip from the dealership to the nearest gas station...)  it was WAY under powered, like driving a barge.  The little 3.3 was gutless and out of it's league for that barge of a van (not exactly aerodynamically efficient...)  Once you get it on full e85... she's peppy and very responsive...  Like you switched engines.

 

I tried pointing this out to the dealerships, point out that if they used e85 in all their FFVs on the lot, they'd probably make more sales, because the cars simply have more power/torque... so feel more fun to drive...  this needs to be sold.

 

Ethanol is not just cleaner (for the air, and your engine), not only supports local/domestic jobs, and helps curb inflation (not sending $ overseas), but it has more power!  We USED to be able to say "will save you money"... but the ethanol industry (as discussed in this and other threads) has seen that this is no longer the case... I do have faith that this will change as cellulose ethanol comes on board, and other producers come on line. ???

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