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cessna

Idea for better ethanol infrastructure

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I just made a trip from NW Iowa to Yorktown VA and made the trip back on 100% E85. Going out two closed E85 pumps in eastern IA and IL caused me to blend down. Prices were very spread out with $1.569 in North Libety IA and $2.509 at Hayes VA(Yorktown VA). Speedway was pretty good at $1.70 to 80 in Oh , IN, and WVa. I talked to the fuel distributor at Hayes and asked why his price was so far off and he said he couldn't get any E98 to blend even though there is a new plant operating at Hopewell VA---just a few miles away. He has a blender licence so an idea popped into my head!!!! Over at Yorktown, Plains All American has converted the old Amoco oil refinery into a transfer point so that Bakken oil railed in is loaded onto barges that are shoved up to New Jersey refineries. What if one of the ethanol plants I am invested in here in the Midwest were to construct or use existing tanks at the old refinery and rail in ethanol unit trains and have the ability to direct market to the SE VA market and also have the ability to load ocean going vessels capable of going to Europe or wherever. I'm going to present the idea to management I know out here but imagine it will be a "nay". What do you all think----ideas?????

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My two cents: It is never a bad idea to explore new opportunities, but I am not sure I buy the original part of this story. Ethanol is stored at fuel terminals all over the country as E98, and then blended down before it leaves. Some terminals (and states they are located in) do allow E98 to leave unblended, and of course, you could buy from ethanol plants. That is why the first part is hard to believe. Most retailers don't want to deal with the federal and state motor fuel taxes (and in some cases sales tax), let alone the instability of the RIN market. That said, even if E98 was not available, E85 should be. The only reason that would explain their economics is if the value of the RIN was simply not included at all. We have ethanol plants sending E85 via rail today to long distance destinations, and of course do it daily with E98. I don't think the solution is that complicated in this particular case. If I can help, I am glad to discuss this with anyone involved, and I am sure that if they are serious about wanting better supply, it can be found. As for your idea, I would need to check with various marketers to see if we are indeed short storage in that part of the country.

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I asked the ethanol plant manager about the $2.50 E85 at Hayes VA and he said it is very possible that is the best that station can do for that area. The plant manager asked how far Charlotte NC was(350 miles). Evidently Charlotte is a hub for ethanol storage and distribution.

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