The Details of Ethanol
LADDONIA - Ethanol. It's one of the most common topics. Even with all the attention, ethanol's origins and effects are still commonly misunderstood.
Ethanol seems to be one of those words people throw around, but don't fully grasp. We've heard everything: It's good for the environment; it's bad for the environment; it hurts your car; it helps your car; you save money; you lose money.
Come Jan. 1, it will be an even bigger topic of conversation. The state's E-10 Mandate will go into effect. That means most gasoline - depending on its octane level - will contain 10 percent ethanol. But that won't change things as much as you might think.
"I daresay most of my members are using E-10, and you don't know it. And that's because ethanol is fairly cheap right now," said Ron Leone, Executive Director of Missouri Petroleum Marketers Association.
Eight states in the country have an E-10 Mandate; Missouri will be the fourth to implement it.
But, Missouri is the only state with a price trigger in the mandate, put in to protect consumers.
"The fuel retailers - only have to sell E-10, 10 percent ethanol only when the price is the same or lower than the price of what we call unblended fuel," explained Leone.
One of Missouri's newest ethanol plants is the Poet Biorefining Plant in Laddonia.
"We grind about 50 thousand corn bushels a day, and we make about 150 thousand gallons of ethanol a day. Everyday," said Robin Venn, General Manager of Poet Biorefining,
"So, the ethanol process starts with corn. We grind that up into a flour. Mix it with recycled waters in the process, and we end up with what we call a beer. The beer is then run through distillation columns, and we end up with 190 proof coming out of there. We run it through a molecular sieve to pull out the rest of the water, and we get 200 proof," explained Amy Vanberschot, Technical Manager at Poet Biorefining.
It's pretty potent, so the plant mixes it with a little gas to poison it. Therefore, no one can use it for anything but fuel.
Last year, the Laddonia plant turned a profit. This year, they're still in the black, but not by as much.
"Just about anybody can do the math and say you can't make a lot of money when ethanol is at a buck fifty, and corn is at 3.50 a bushel," said Venn.
The big debate with ethanol surrounds E-85, that's 85 percent ethanol blended with 15 percent unleaded gasoline. The price for E-85 is cheaper, but drivers do see a loss in gas mileage. Something not typically seen with E-10. Some care; some think it evens out.
"The price I pay for it makes up for it. It's cheaper. It's better on the environment. I don't know, I just like it. Seems like it runs better on it. I get a little bit less," explained Scott Wallenmeyer, a Jefferson City driver.
On Oct. 19, E-85 cost $2.15; 50 cents cheaper than regular gas. But the corn growers association says that's not low enough.
"That's getting closer to where we think it ought to be. Today, honestly, there should be between 80 and 85 price differential between E-85 and what it's actually selling for," explained Gary Marshall, Chief Executive Officer of Missouri Corn Growers Association.
Ethanol is relatively cheap to make. It costs about $1.56 to make a gallon of ethanol. But blenders get a 51 cent tax credit per gallon. So the finished product costs $1.05 a gallon.
"That's not what the consumers are paying. So somewhere between the ethanol plant and the gas pump, someone is making a lot of money. And, I don't know who it is," said Marshall. He says everyone along the supply chain - aside from the ethanol plants - is making some extra profit. From the blenders and major oil companies to advertising, Marshall says they're all increasing prices and making money because they can and no one's stopping them.
The corn growers hope the lower the price goes, the more profitable it will be for drivers to use E-85. But there's a speed bump on the way to that goal - lower gas mileage.
"E-85 has about a 20 to 30 percent decrease in your miles per gallon, which means you're filling up more often. Which is why many of my members are pricing it lower than fossil fuels because you're going to be purchasing it more," explained Leone.
Some believe the environmental benefits of E-85 supersede the lost gas mileage.
"It reduces greenhouse gas emissions by 35 percent compared to gasoline. That's a benefit everybody can buy into there," said Ethan Taylor, E-85 Coordinator from the Missouri Corn Growers Association.
But not everyone can buy every type of ethanol-based fuel. The only cars that can handle E-85 are flexible fuel vehicles - cars that can run on blended and unblended gasoline. And most of us don't drive those yet. Even if more people eventually do buy flex-fuel vehicles, they may have trouble filling up with E-85.
"The thing with E-85 today is we are starting to get more cars but we don't have enough distribution sites," said Marshall.
There are only 85 E-85 stations in the state. In mid-Missouri, there are eight in Columbia and five in Jefferson City. Now that we're seeing a big push for ethanol in Missouri, what is the ultimate goal?
"Our goal is 15 billion gallons of ethanol from 15 billion bushels of corn by the year 2015," said Marshall. He says that would account for about 10 percent of the nation's energy usage.
"Everybody understands it reduces our dependence on foreign oil, it helps clean up the air, its a great market for farmers, but in the end consumers want a really good deal. And, we believe if E-85 is priced the way we think it will in the future, it's gonna be a great deal for consumers," said Marshall.
Reported by: Megan Murphy
Edited by: Kathryn Lucchesi
Published: Tuesday, November 20, 2007 at 9:06 PM
Last Updated: Wednesday, November 21, 2007 at 12:54 AM
LADDONIA - Ethanol. It's one of the most common topics. Even with all the attention, ethanol's origins and effects are still commonly misunderstood.
Ethanol seems to be one of those words people throw around, but don't fully grasp. We've heard everything: It's good for the environment; it's bad for the environment; it hurts your car; it helps your car; you save money; you lose money.
Come Jan. 1, it will be an even bigger topic of conversation. The state's E-10 Mandate will go into effect. That means most gasoline - depending on its octane level - will contain 10 percent ethanol. But that won't change things as much as you might think.
"I daresay most of my members are using E-10, and you don't know it. And that's because ethanol is fairly cheap right now," said Ron Leone, Executive Director of Missouri Petroleum Marketers Association.
Eight states in the country have an E-10 Mandate; Missouri will be the fourth to implement it.
But, Missouri is the only state with a price trigger in the mandate, put in to protect consumers.
"The fuel retailers - only have to sell E-10, 10 percent ethanol only when the price is the same or lower than the price of what we call unblended fuel," explained Leone.
One of Missouri's newest ethanol plants is the Poet Biorefining Plant in Laddonia.
"We grind about 50 thousand corn bushels a day, and we make about 150 thousand gallons of ethanol a day. Everyday," said Robin Venn, General Manager of Poet Biorefining,
"So, the ethanol process starts with corn. We grind that up into a flour. Mix it with recycled waters in the process, and we end up with what we call a beer. The beer is then run through distillation columns, and we end up with 190 proof coming out of there. We run it through a molecular sieve to pull out the rest of the water, and we get 200 proof," explained Amy Vanberschot, Technical Manager at Poet Biorefining.
It's pretty potent, so the plant mixes it with a little gas to poison it. Therefore, no one can use it for anything but fuel.
Last year, the Laddonia plant turned a profit. This year, they're still in the black, but not by as much.
"Just about anybody can do the math and say you can't make a lot of money when ethanol is at a buck fifty, and corn is at 3.50 a bushel," said Venn.
The big debate with ethanol surrounds E-85, that's 85 percent ethanol blended with 15 percent unleaded gasoline. The price for E-85 is cheaper, but drivers do see a loss in gas mileage. Something not typically seen with E-10. Some care; some think it evens out.
"The price I pay for it makes up for it. It's cheaper. It's better on the environment. I don't know, I just like it. Seems like it runs better on it. I get a little bit less," explained Scott Wallenmeyer, a Jefferson City driver.
On Oct. 19, E-85 cost $2.15; 50 cents cheaper than regular gas. But the corn growers association says that's not low enough.
"That's getting closer to where we think it ought to be. Today, honestly, there should be between 80 and 85 price differential between E-85 and what it's actually selling for," explained Gary Marshall, Chief Executive Officer of Missouri Corn Growers Association.
Ethanol is relatively cheap to make. It costs about $1.56 to make a gallon of ethanol. But blenders get a 51 cent tax credit per gallon. So the finished product costs $1.05 a gallon.
"That's not what the consumers are paying. So somewhere between the ethanol plant and the gas pump, someone is making a lot of money. And, I don't know who it is," said Marshall. He says everyone along the supply chain - aside from the ethanol plants - is making some extra profit. From the blenders and major oil companies to advertising, Marshall says they're all increasing prices and making money because they can and no one's stopping them.
The corn growers hope the lower the price goes, the more profitable it will be for drivers to use E-85. But there's a speed bump on the way to that goal - lower gas mileage.
"E-85 has about a 20 to 30 percent decrease in your miles per gallon, which means you're filling up more often. Which is why many of my members are pricing it lower than fossil fuels because you're going to be purchasing it more," explained Leone.
Some believe the environmental benefits of E-85 supersede the lost gas mileage.
"It reduces greenhouse gas emissions by 35 percent compared to gasoline. That's a benefit everybody can buy into there," said Ethan Taylor, E-85 Coordinator from the Missouri Corn Growers Association.
But not everyone can buy every type of ethanol-based fuel. The only cars that can handle E-85 are flexible fuel vehicles - cars that can run on blended and unblended gasoline. And most of us don't drive those yet. Even if more people eventually do buy flex-fuel vehicles, they may have trouble filling up with E-85.
"The thing with E-85 today is we are starting to get more cars but we don't have enough distribution sites," said Marshall.
There are only 85 E-85 stations in the state. In mid-Missouri, there are eight in Columbia and five in Jefferson City. Now that we're seeing a big push for ethanol in Missouri, what is the ultimate goal?
"Our goal is 15 billion gallons of ethanol from 15 billion bushels of corn by the year 2015," said Marshall. He says that would account for about 10 percent of the nation's energy usage.
"Everybody understands it reduces our dependence on foreign oil, it helps clean up the air, its a great market for farmers, but in the end consumers want a really good deal. And, we believe if E-85 is priced the way we think it will in the future, it's gonna be a great deal for consumers," said Marshall.
Reported by: Megan Murphy
Edited by: Kathryn Lucchesi
Published: Tuesday, November 20, 2007 at 9:06 PM
Last Updated: Wednesday, November 21, 2007 at 12:54 AM
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