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99 cents/gallon in Lowell, Michigan!

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Just 45 minutes from the ethanol plant is the J&H Lowell/Fallasburg Mobil location. I've been reporting here that their price has been plummeting to what is perhaps record territory.


Well, I have now captured the perhaps iconic image of the price sign showing $1.99/gallon for gasoline, and $0.99/gallon for E85! That's a 50% spread! I was skeptical of the prospects for gasoline to fall below $2/gallon here simply because of how pricing works here in Michigan, but with the outlook reflecting prices to potentially fall much further, it has happened.


I redeemed $0.16/gallon to pay $0.839/gallon. I must admit that I am concerned about who is taking the hit. Now I think it isn't only the ethanol plant taking the hit, but also J&H, which has to pay at least 60 cents/gallon in taxes. From a consumer standpoint, it's AWESOME! Definitely worth the hour drive.


If I had to guess, I'd say some of these retailers are making up for the negative margins with the diesel prices which remain quite high, and also ethanol-free... which I know is not costing them $3.60/gallon right now.



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We're living in crazy times and not all is what it seems. I'm in an ethanol plant that I'm going to report a little over 300% ROI. That is mostly income but also a sizable capital gain. I'm sure it will never be like this again.

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I'm beginning to think about banning the phrase "I never thought I'd see that again", or variants of it.


I never thought I'd see fuel prices fall below $3/gallon. Then I paid $2.83 in December 2012.


I never thought I'd see gasoline prices drop below $3/gallon, and they have several times since late 2012. Now they have again, and haven't stopped.


I never thought I'd see $1.99/gallon, and then I paid $1.74 in July 2013 and saw a non-discounted price of $1.99 last December.


I never thought I'd see 99 cents/gallon, but here it is!


I can go on if you'd like, but I'm guessing you get my point by now. I was seriously convinced that we'd never see gasoline prices this low again. If we saw another 2008, prices would have gone so high that $3 would be the point at which prices would bottom out.


What's weird is that we're not seeing a total financial collapse like we did back in 2008. This is fishy.

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Pretty much anyone who isn't OPEC is feeling the hurt on this one. Any wise ethanol company management like ours would have built up a rainy day fund for falling prices, to insulate their bottom line... but I don't think anyone saw this price fall coming.


In times like this though, I suppose it's a good thing that only a small percentage of ethanol goes into E85. With gasoline prices falling, demand is going up as predicted, so ethanol plant margins can't be THAT bad. That said, even I am getting concerned about how these prices are viable. The consumer side of me is now being overpowered by concern for how $1.17/gallon is possible.


With ISIL, I'm glad news organizations had the decency to not show those beheadings. That is not only beyond the pail, but words fail to describe - for anyone really - how unfathomable this group's actions are. No legitimate religion teaches hatred for others, and the belief that any other religion is inferior.


Any rate, another thing that bewilders me is that ISIL had virtually no effect on world oil prices. Any instability in the Middle East has almost always historically driven prices up. Of course, ISIL is making their money by stealing oil and selling it on the global market. While we only get a fraction of our oil from the Middle East, I'm glad to know that I'm guaranteed not to be contributing a dime to their atrocities.

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