Ethanol shortages may drive up gasoline prices this summer.

[NNadir]

Gasoline prices will be unusually high and shortages might occur this summer, because the U.S. ethanol industry can't keep up with the demand for fuel-grade alcohol to mix with gasoline, the head of the U.S. Energy Information Administration told a Senate committee Wednesday.

Merely "short-term challenges," countered Bob Dinneen, president of the Renewable Fuels Association, the ethanol trade group. Whatever can't be produced here can be imported, he said.

But imported ethanol, mostly from Brazil, carries a 54-cents-per-gallon tariff that would boost fuel prices even more, unless it were waived. (Story: Energy independence spurs Brazil to boost ethanol goals)

Ethanol - grain alcohol made mainly from corn in the USA - is being promoted by the auto and ethanol industries and the government as a substitute for gasoline, usually in a mix called E85 that is 85% ethanol and 15% gasoline.

But the comments Wednesday at the Senate Environment and Public Works Committee underlined how distant a goal that is. The hearing wasn't even about a goal as ambitious as E85. It was to discuss ethanol as a substitute for MTBE, a clean-air additive in gasoline. Replacing it with ethanol would require only about 8% as much ethanol as E85 requires.

http://news.yahoo.com/s/usatoday/20060330/bs_usatoday/ethanolshortagecouldupgasprices

[darkmaestro019]

1. And when are they going to offer checks to people NOT to grow corn?

This is ridiculous........

[liberal N proud]

2. They will stop an nothing to pull the dollars from the pockets of

the American people.

Last sumer it was an oil shortage, so now it is going to be an ethanol shortage.

BULLSHIT all BULLSHIT just to use an excuse.

[Broadslidin]

3. Hey, Just Cut Archers Daniel Midland Another Federal Subsidy Check......

The financially inefficient amount
of fossil fuel energy required
to produce ethanol from corn
is a well known A.D.M. "Con Game" in the oil biz.

If you ever get the chance,
take a look at the Brazil ethanol production model.
(The price of crude oil must be well above $45 a barrel
in order to make ethanol made from Sugar Cane,
economically feasible.)

:yoiks:

[Oerdin]

4. Believe it or not

It takes time to build factories, set up destribution systems, and all the rest that is required to distribute ethanol. The good news is that investment dollars tend to chace the highest return so the current high prices should attract several start ups and new operations from the big players. Clearly there will be an adjustment period but the end result will be more ethanol being substituted for foreign oil. Isn't that a good thing?

True, real energy independence won't occur without massive increases to CAFE, a carbon tax, and laws mandating a switch to nonimported energy (hopefully non-GHG producing energy) but that has no bearing on the current price of ethanol.

[JohnWxy]

5. If you've read the post, why not react... Call or email your Legislators

TEll them to enable us to import more ethanol from Brazil. AN executive order could waive the tariff. We need to get our ethanol percentage (of the fuel supply) up to 5% to 10% of the total to provide the necessary insurance against the comeing oil supply disruption (IRAN, terrorist attacks in Saudia Arabia and around the world, political uncertainties in Venezuela, NIgerian rebels, 2006,-7,-8 hurricane season - something like 23 % of our Gulf of Mexico Oil operations are still off line due to 2005 hurricane season!) which will (and could occur anytime) in the next 1 to 5 years. When this disruption of 5% to 10% occurs it will send gasoline prices up dramatically and may cause a recession. Will you be one of the one's laid off? Evn if you are not it doesn't do any of us any good to have the economy slide into a recession.

The demand right now from the oil companies for ethanol is driving up the prices (plus it takes some time to build new ethanol plants - figure about 1 year). This is what happens when you put off a sensible policy too long and then try to make up for lost time because the wolf is at your door - NOW (thank you EXXON-Mobil and the rest of the oil industry - and the Bush administration). But that's water over the dam now.

We should definitely, be impoting much more ethanol from Brazil. And even after we boost domestic ethanol production we should STILL import ethanol from Brazil (if other don't get to it ahead of us). Brazil has the capacity to bump up production to meet additional demand - such as from US!