Infrastructure not ready for all the ethanol to be produced in '08

Jan 28, 2008

By the end of 2008, the United States will have the capacity to produce 13 billion gallons of ethanol, but a Purdue University expert said the maximum ethanol the market can handle is 12 billion gallons, and perhaps considerably less.

"Ethanol production capacity has grown tremendously fast, and it's going to almost double from its high level today to the end of 2008," said Wally Tyner, Purdue Extension agricultural economist. "It has grown so fast that the capacity to produce is bigger than the capacity to market."

As a result, Tyner and colleagues forecast a few possible changes in 2008:

* The price of ethanol will be lower.

* Some ethanol plants will have to reduce production or shut production down.

* Some ethanol may have to be exported.

However, Tyner said a combination of these factors is most likely.

"There will be a lot of pressure on ethanol prices in 2008 and with high corn prices that means there will be a lot of pressure on profitability of ethanol during the next year," he said.

The challenge is that once all this ethanol is produced, it has to be made available to consumers at gas stations, and shipment of ethanol is an issue.

Tyner said that in order to build the ethanol market to its maximum potential - 14 billion gallons, or 10 percent of gasoline consumption - the capacity has to exist to transport it by rail to the East Coast, West Coast and the South. Because of its corrosive nature, ethanol can't be moved by pipeline.

"Once at its destination, there needs to be terminal blending capacity so the ethanol can be blended," Tyner said. "That means building new tanks and, in some cases, building new rail lines into the terminals.

"All this can happen, but it takes time. It is already being done in Florida, but not everywhere, and it most certainly will not be done by the end of 2008. This puts a real infrastructure constraint on even getting to the physical potential."

Tyner said that expanding the E85 market in the longer term means producing more flex-fuel cars and installing more E85 pumps in gas stations.

"That's a long, slow process," he said. "Automotive manufacturers will be moving that way, but changing the percentage of the fleet that's flex-fuel will take years.

"But the faster we move in that direction, the faster it will happen."

Source: Purdue University

Explore further: Research band at Karolinska tuck Dylan gems into papers

add to favorites email to friend print save as pdf

Related Stories

Biotech offers promise for producing fuel

Aug 09, 2010

Fuel may be a messy business now, as the oil spill fouling the Gulf reminds us. But it might not always have to be. Scientists envision facilities that churn out black gold by enlisting engineered bacteria, yeast and algae ...

Biodiesel industry on hold after tax credit runs out

Jan 11, 2010

The biodiesel industry is revving up efforts to reinstate the U.S. biodiesel tax credit, warning that as many as 23,000 jobs could be at risk if lawmakers don't revive the program that expired at the beginning of 2010.

Recommended for you

Research band at Karolinska tuck Dylan gems into papers

14 hours ago

(Phys.org) —A 17-year old bet among scientists at the Karolinska Institute has been a wager that whoever wrote the most articles with Dylan quotes before they retired would get a free lunch. Results included ...

A simulation game to help people prep for court

Sep 25, 2014

Preparing for court and appearing before a judge can be a daunting experience, particularly for people who are representing themselves because they can't afford a lawyer or simply don't know all the ropes ...

When finding 'nothing' means something

Sep 25, 2014

Scientists usually communicate their latest findings by publishing results as scientific papers in journals that are almost always accessible online (albeit often at a price), ensuring fast sharing of latest ...

User comments : 1

Adjust slider to filter visible comments by rank

Display comments: newest first

SDMike
not rated yet Jan 28, 2008
The solution to this "problem" is both obvious and simple. Stop preventing the sale of conversion devices that allow automobiles to use 100% ethanol. This solves the "problem" for both ethanol producers and consumers. Oil companies don't like it so it won't happen.
Second, prevent oil companies from selling ethanol blends of greater than 10%. This allows creation of an alternative fuel industry not controlled by big oil.
Third, allow the use of a denaturing substance other than gasoline. The idiotic requirement that only gasoline can be used to denature ethanol fuel is clearly government creating restraint of trade.
In fact, the article's "problem" is entirely caused by oil industry control over congress.