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sdholloway56
Senior Advisor

from an oil and gas industry rag

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9 Replies
sdholloway56
Senior Advisor

Re: from an oil and gas industry rag

BTW, oilprice is an excellent online publication.

The couple of click through articles embedded in this one are a good sample.

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sw363535
Honored Advisor

Re: from an oil and gas industry rag

Thanks..... good read

I still think the desperation demanding of the ethanol industry (and those of us who support them) is problematic.  If it cannot compete and find market without epa forcing it, how much of a future does that industry have?

It is just not a good look....... why not ask for less regulation over blending?   1.25 ethanol and $2.20 gas seems like a easy market for blending incentive.  Are there huge federal taxes on ethanol that are not reported?

Would seem discouraging to think that not one of our environmental legislated costly energy ideas can compete in a real world senario.  This one looks good with the wonderful acceptance of the feeding of byproducts.

rickgthf
Senior Advisor

Re: You keep saying "ethanol should compete on it's own merits" but ....

You keep saying "ethanol should compete on it's own merits" but what if the game is so rigged against it that it's just unreasonable to expect that.

  Take, for example the case for ethanol's role as an octane booster. Ten percent ethanol is generally sufficient to raise 84 octane to  the required 87 octane of finished gasoline.  At the current price of $1.27 per gallon, it costs 12.7 cents per gallon of gasoline. 

  If,  however, you used MTBE, of which some 40,000 barrels per day are still being produced in South Texas and shipped primarily to Mexico and Chile for roughly $1100 per tonne or about $3.10 per gallon it would cost you  roughly 30 cents per gallon to do the job. 

 Not only that, but consider the oxygenate value of ethanol vs MTBE.  It only takes 5.8 %ethanol to achieve the required oxygen content of finished gasoline where as it takes 11.7% MTBE.  That's 7 cents worth of ethanol does the same job as 36 cents worth of MTBE.

Ethanol, by any measure, does the same job as MTBE, the next least cost additive, at far less cost.

  So ask yourself, why the "competitive" disadvantage?  After looking at all the other factors, you are left to conclude it's due simply to the anti-competitive bias of the petroleum industry, namely they produce or could produce MTBE but not ethanol.  Or in other words, "we don't want it because we don't make it."

rickgthf
Senior Advisor

Re: Another comment if I may.

We have a hybrid electric Volt.  When we run on electric it costs 1.25 cents per mile to run, the same car at 45 mpg it costs 7.6 cents per mile.

  Why don't more people drive electric cars?   Maybe it's simply because the petroleum industry exerts such dominate control over the conversation?  It's amazing how many people just don't understand how economical electric vehicles are.

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sw363535
Honored Advisor

Re: Another comment if I may.

The hybrid is a fantastic car for the first owner...... But it faces the same nonsense as the diesel pickup or car.  The condemning of diesel never did make sense.

No reason for hybrids to be so expensive over gas to buy and then get nothing extra out of them to trade.  I have tended to blame that on regulations for emissions and safety and have had a hard time correlating that to the fuel producer.

Eventually battery disposal is going to be an issue and for a straight elec..... my cord won't reach out here, we actually drive for hours to get places.  but I have been impressed with the toyota hybrid avalon my friend has had for several years.  But when he traded it was a $6000 penalty to stay in a hybrid.  Makes that fuel savings less appealing.

also  the infrastructure is just not there for electrics unless it is just short trips around town.....  By the time it is in place, the public will be on to the next big thing.  That is the issue for ethanol..... it is just not a glamor issue anymore---- energy wise.

and finally .....fossil fuels just don't appear to be depleting that much,,,,, the premise of developing alternate energy doesn't appear to be so true.

That is the bad part about technology we can't control who gets it.  🙂

appreciate the points made and the discussion

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powermajor
Frequent Contributor

Re: Another comment if I may.

Yeah Mr Trump!!! Thanks for overriding the ethanol mandate for over thirty petroleum producers. I thought I heard you say that you would stand with farmers and uphold the mandate at your Iowa pep rally, but I must have misunderstood. I'm glad you didn't mess with our China grain export markets... Oh wait- another mistake on my part, but at least you left NAFTA alone so we still have our Canadian and Mexican markets... Oops, another of MY mistakes. I'm really happy that you're looking out for me and my fellow "fly over country" voters. Well... at least we got our tax cut- oh yeah, my brother in law says that he paid $3000 more in income taxes last year on the same income that he claimed in 2017... guess he couldn't claim his business expenses in 2018. Aw screw him, he won't mind footing the bill for our $16 billion Ag. bailout this year. Love what you're doing for us rural voters! You've got my vote in 2020!!!

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sdholloway56
Senior Advisor

Re: Another comment if I may.

In regards to trade matters, at least there was a broad public benefit to be sought, even if unfortunately The Gang That Couldn't Shoot Straight was in charge.

In this case I don't see any purpose other than flat out corruption. If the RIN system was causing a hardship for small refiners then it could have been rewritten to help mitigate that.

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wrightcattle
Veteran Advisor

Re: from an oil and gas industry rag


@sdholloway56 wrote:

https://oilprice.com/Energy/Energy-General/Corn-Industry-Battered-By-Shocking-Ethanol-Decision.html


It's really 2 bad that the 10% E  blend is not By Law. 

No rins tickets No supposed magic crap. 

Just everyone uses the 10% E blend.  Period. 

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powermajor
Frequent Contributor

Re: from an oil and gas industry rag

Agree 100%

PM

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