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Jerseydave
10-15-2007, 07:46 PM
Over $86 barrel and I have oil heat. Where's the Bio-fuel??? We have alot of corn in this country (many farmers are growing more because they get more for it than ever) so why don't we substitute bio-diesel for home heating oil?

They say heating oil may cost 30% more this winter than last winter! :mad:

Should i switch to natural gas or stick it out in hopes that a substitute fuel will come along soon?

Leroy
10-15-2007, 11:13 PM
A farmer friend said he is selling his whole crop to ethanol producers this year, at record prices.

He also said there is so many ethanol factories being built and they tell him they have a 2 year payback now.

He isn't sure we have the farming capacity to support the factories being built now.

Just think if they sold it 100% ethanol, $2.50/gallon of ethanol.....

bigmac
10-15-2007, 11:49 PM
A farmer friend said he is selling his whole crop to ethanol producers this year, at record prices.

He also said there is so many ethanol factories being built and they tell him they have a 2 year payback now.

He isn't sure we have the farming capacity to support the factories being built now.

Just think if they sold it 100% ethanol, $2.50/gallon of ethanol.....

Ethanol investment - pretty dicey deal right now. Beginning to look sort of like a house of cards.

Boom fades as ethanol floods the marketplace


Workers in Janesville, Minn., were dwarfed by stainless steel fermenting tanks in the background Tuesday as they worked on the US Bio*Energy ethanol plant. A glut of ethanol, plus high corn prices, have put a damper on enthusiasm for the corn-to-fuel technology.

The growing pains of a young industry sting some ethanol producers; with plant capacity outstripping immediate demand, many expect profits to be depressed through next year.

By Matt McKinney, Star Tribune

Last update: October 09, 2007 – 9:44 PM


The ethanol party is over, at least for now.

Expensive corn and a glut of ethanol has dimmed the bonanza that swept across the corn belt last summer, raining cash on rural communities.

The industry's sobering morning-after has seen announcements in recent weeks that some of the largest players would delay building new plants, while profits everywhere have shrunk from their 2006 highs.

"It's not looking as rosy as it was a year ago," said corn farmer Jerry Larson, speaking by cell phone on Tuesday from the cab of his tractor.

Last year saw predictions of sky-high profits from turning corn into fuel for an energy-starved nation. Even domestic auto makers were pushing fuel from the Midwest, not the Mideast.

An onslaught of new plants created so much ethanol that it may take years for things to shake out, and some plants may suffer losses or delays waiting for demand to catch up.

The pain may be sharpest for newly public companies that now face expectant investors and an imbalance in ethanol prices. Some of the older players, including many of the state's farmer-owned cooperatives, are better positioned to weather the storm.

"There's a different mentality in investing between Wall Street and Main Street," said Rick Kment, an ethanol analyst with DTN, based in Omaha. The farmers have a long-term stake in the ethanol plants, while "the publicly traded companies have a mentality that says, 'What have you done for me lately?' "

For one thing, many farmer-owned co-ops paid off their plants' construction costs ahead of time.

'A hard time's coming'

"Everyone knows a hard time's coming," said Steve Core, a project developer for Fagen Inc., a Granite Falls, Minn., ethanol plant builder. "They just don't know when."

Some of the larger companies, many of which went public with a bang last summer, are now scaling back as their stock prices have taken a steady beating. VeraSun Energy Corp., of Brookings, S.D., one of the nation's largest ethanol producers, announced plans to delay construction of a 110-million-gallon-a-year plant in Reynolds, Ind. The company will continue with plans to open a similar-size plant in Welcome, Minn., according to a spokesman.

And the third-largest ethanol producer in the country, US BioEnergy, based in Inver Grove Heights, said it is holding off on new projects for now, though it will continue construction of a 100-million-gallon-a-year plant that broke ground this summer in Janesville, said company CEO Gordon Ommen.

"It's a commodity business and it's a young, immature industry and you're going to have this," Ommen said. The bottom line predicts a strong future for corn-based ethanol, he added, noting that all ethanol is currently being blended with oil-based gasoline or diesel fuel.



One plant's numbers

The slumping ethanol market can be seen in the financial results at Granite Falls Energy, which opened a 50-million-gallon ethanol plant in late 2005. Revenues in its most recent quarter fell to $23 million from $29 million a year ago. Profits plummeted from $15 million to $2 million. The company's year so far is mixed, with profits down 28 percent for the first three quarters on a revenue gain of 15 percent, to $74 million.

Still, the company paid off its construction loans in June, four years ahead of schedule.

The squeeze comes from basic economics. Ethanol futures prices have fallen from about $2.50 at the beginning of the year to $1.55 Tuesday. The price of corn, meanwhile, has soared this year, with futures trading above $4 a bushel earlier this year before falling back to below $3.50.

It may take a year for the ethanol industry to turn around, but that depends on weather, demand and the unpredictable nature of the commodities markets.

"I don't think anybody's got a very good crystal ball," said Ralph Groschen, a marketing specialist with the Minnesota Department of Agriculture.

If an ethanol project has steel in the ground today, with permits approved and stock sold, it will continue, he predicted.

The heavily subsidized industry has lobbied for even more government help, including an increased mandate for the use of ethanol in the nation's fuel supply.

"At the very least, Congress should be mandating that any state that's producing ethanol should be mandating 10-percent ethanol in gasoline," as Minnesota has done for 10 years, said independent analyst Alan Roebke, of Chaska.

Ethanol producers may benefit from another Congressional mandate, depending on what happens to the 2007 energy bill. The government already requires an increasing portion of the nation's fuel supply come from renewable fuels, from 4 billion gallons last year to 7.5 billion gallons by 2012. The Senate energy bill calls for a dramatic increase in that level, known as the Renewable Fuels Standard, to 36 billion gallons annually by 2022. A House version of the bill has no such mandate, and a compromise has yet to be worked out.

Such a mandate would far outstrip the industry's current capacity, about 7.8 billion gallons annually, according to the Renewable Fuels Association. New plants coming online will increase that by 6.4 billion gallons.

Keith Kor, general manager of the Corn Plus plant in Winnebago, Minn., remembers a similar scenario in 1995 and 1996 when high corn prices forced some plants to close. Yet the long-term effects have helped farmers.

A farmer today has several markets for corn, whereas before the ethanol industry, "he had to go to the one elevator" in his area, Kor said. "If you look back at why we did these ethanol plants, it was to drive the price of corn back up, and we've achieved that goal," he said.

sand2snow22
10-15-2007, 11:52 PM
Should i switch to natural gas or stick it out in hopes that a substitute fuel will come along soon?

I have oil heat, too. I debate this all the time. Right now, I'm staying with Oil. 1) I filled my 575 gallon tank last winter at low prices. 2) Oil burns hotter than natural gas = more heat, my furnace is 89% efficient 3) To me, there is more demand and will be more demand for natural gas in the future 4) We're stuck with whatever NW Natural gas determines as the price, you can shop around for oil and get the lowest price 5) They are adding biodiesel blends in oil heat. I think Oregon will make it mandatory soon. I can't run 99% biodiesel, yet because my tank is underground outside. Biodiesel tends to gel up in the cold.

Downfall-Natural gas burns cleaner, I think. Resale value, up here the Californians moving here like and are use to natural gas.

If you really want to go all out and have the money, I hear electric heat pumps are the way to go. Super efficient and when it's below 40 degrees a backup natural gas furnace kicks in......

Leroy, I thought ethanol prices were on the way down?

Leroy
10-16-2007, 12:03 AM
I love the ethanol trend, great for farmers, great for new business in america and for every gallon of ethanol that is less money sent overseas.

sand2snow22
10-16-2007, 02:40 AM
Because oil is traded in dollars I think higher oil prices also have to do with a weaker US dollar.

swagboy
10-16-2007, 08:33 PM
Rising oil prices have EVERYTHING to do with a slumping Greenback. Find the price of oil in Euros... not much change.

The same goes for Gold, commodities in general, currencies, etc... Canadians are loving the strong beaver-buck, but there's not a lot of discussion about what all this really means for the whole economic situation. If the US dollar just slides into oblivion, Americans won't notice it until it's too late (unless they go overseas or are in the import business) but everyone else will when the American purchasing machine grinds to a halt.

As for Ethanol... couldn't be worse IMHO. At least corn-based ethanol, which takes almost as much energy to produce as you create in the ethanol. Sugar based ethanol is at least energy-positive...

Good for the environment? Not really. Good for the economy? Maybe in the (very) short term, but see how everyone likes it when their Cornflakes cost $20/box and gas is still $5/gallon or more.

Just my $0.02.

bigmac
10-16-2007, 09:19 PM
As for Ethanol... couldn't be worse IMHO. At least corn-based ethanol, which takes almost as much energy to produce as you create in the ethanol. Sugar based ethanol is at least energy-positive...

Good for the environment? Not really. Good for the economy? Maybe in the (very) short term, but see how everyone likes it when their Cornflakes cost $20/box and gas is still $5/gallon or more.

Just my $0.02.

Ah...the Pimental Study raises its head again. That's been debunked many time in the 9 years (1998) since it came out.

38% net energy gain for ethanol from corn, including the cost of growing the corn and trucking the ethanol around the country (can't be sent in a pipeline) according to the Argonne National Laboratory (US Dept of Energy laboratory).

I do worry about the cost of corn (although a lot of different plant material can be used), the political subsidies, and especially the fact that it takes about 5 gallons of water to make one gallon of ethanol. That's a lot of stress on already distressed aquifers.

$5 per gallon gasoline? You bet. That's going to happen no matter what we do. In fact most studies I've read indicate $6 per gallon within three years.

Jerseydave
10-16-2007, 09:35 PM
.

$5 per gallon gasoline? You bet. That's going to happen no matter what we do. In fact most studies I've read indicate $6 per gallon within three years.[/QUOTE]

OUCH! I guess slip fees, boat lifts and bottom paint will go up too, since we won't be able to tow our boats to the water! (at least not at a reasonable cost)

cbryan70
10-16-2007, 09:41 PM
E-85 is harder on engines and gets 1/3 less gas milage. There have been tones of studies done on this at all major auto industries. It seems to me that they are just trying to satisfy the public with a temporary fix to a huge growing problem.

swagboy
10-16-2007, 09:49 PM
BigMac: I will do some research with respect to what you are describing... my understanding was that corn-based ethanol is energy-negative. If I'm incorrect I'm not above saying I was wrong.

As far as $6/gal gas... It wouldn't surprise me if that target were exceeded.

Your point regarding water is perhaps the most astute, as the whole water resource issue is, IMO, not even close to being the important issue of discussion it should be. In Canada we have the Alberta Tarsands, but the water issue and the amount of natural gas consumed in the removal and refining process is not yet on the radar. One day it will be.

Ultimately, the answer lies in reduced consumption... But that's a solution that nobody wants to hear - and I have a carburated 351W in my Tristar, so I'm part of the problem, even though I consider myself an "environmentalist/conservationist".

Farmer Ted
10-16-2007, 09:50 PM
E-85 is harder on engines and gets 1/3 less gas milage. There have been tones of studies done on this at all major auto industries. It seems to me that they are just trying to satisfy the public with a temporary fix to a huge growing problem.


how is it harder on engines? Isn't it higher Octane?
I was also under the impression that the hit on MPG was around 10%

swagboy
10-16-2007, 09:58 PM
how is it harder on engines? Isn't it higher Octane?
I was also under the impression that the hit on MPG was around 10%


From wikipedia.org:

"As of 2006, approximately one in forty vehicles on the road in the U.S. can run on E85.

Unfortunately, because ethanol contains less energy than gasoline, fuel economy is reduced for most 2002 and earlier FFVs (flexible-fuel vehicles) that are currently on the road by about 30% (most after 2003 lose only 15-17%, or less) when operated on pure E85 (summer blend). Some of the newest vehicles can lessen this reduction to only 5-15%, but as recently as 2007 (?) the Environmental Protection Agency stated on its website that several of the most current FFVs were still losing 25-30% fuel efficiency when running on E85. A few cars actually claim to provide better fuel economy on E85 than on gasoline; for example, the Saab AeroX turbocharged concept car actually claims better fuel economy and higher power on 100% ethanol (E100) than gasoline through using a higher compression ratio engine. Still, for almost all FFVs, more E85 is typically needed to do the same work as can be achieved with a lesser volume of gasoline."

Same kind of thing as LNG - lower calorific value = more fuel burned to achieve equal energy output.

As for "harder on engines"... it's not, but many components must be changed due to characteristics of e85, not the least of which is electrical conductivity.

swagboy
10-16-2007, 10:10 PM
Ah...the Pimental Study raises its head again. That's been debunked many time in the 9 years (1998) since it came out.

38% net energy gain for ethanol from corn, including the cost of growing the corn and trucking the ethanol around the country (can't be sent in a pipeline) according to the Argonne National Laboratory (US Dept of Energy laboratory).


http://en.wikipedia.org/wiki/Ethanol_fuel

"Opponents of corn ethanol production in the U.S. often quote the 2005 paper [49] of David Pimentel, a retired Entomologist, and Tadeusz Patzek, a Geological Engineer from Berkeley. Both have been exceptionally critical of ethanol and other biofuels. Their studies contend that ethanol, and biofuels in general, are "energy negative", meaning they take more energy to produce than is contained in the final product.

A 2006 report by the U.S. Department Agriculture compared the methodologies used by a number of researchers on this subject and found that the majority of research showed that the energy balance for ethanol is positive.[50] A 2006 study published in Science analyzed six studies, normalizing assumptions for comparison; Pimental and Patzek's studies still showed a net energy loss, while four others showed a net energy gain.[51] Furthermore, fossil fuels also require significant energy inputs which have seldom been accounted for in the past."

So we were both (kinda) correct. In terms of greenhouse gas savings vs. gas, however, corn comes in dead last, at 10-20% savings, as opposed to sugar cane at the top end with 87-96% savings.

cbryan70
10-16-2007, 10:31 PM
The major difference in cars that run on e-85 to regular gas is special corrosion resistant things.. i forget the exact name of what it is called that they use for the engines to prevent deterioration of engines. The only reason i know this information is i work with an engineer that worked for mercedes, as well as gm. They have been testing and trying to make e-85 engines run more efficient. When you think about the cost you save buy using e-85 compaired to regular gas it may be a close to none savings after you take into account the loss of gas mileage.

cbryan70
10-16-2007, 10:33 PM
I also thought that e-85 cost alot more money/energy to make? IS this what the other argument is about?

bigmac
10-17-2007, 12:35 AM
duplicate post

bigmac
10-17-2007, 12:36 AM
http://en.wikipedia.org/wiki/Ethanol_fuel

"Opponents of corn ethanol production in the U.S. often quote the 2005 paper [49] of David Pimentel, a retired Entomologist, and Tadeusz Patzek, a Geological Engineer from Berkeley. Both have been exceptionally critical of ethanol and other biofuels. Their studies contend that ethanol, and biofuels in general, are "energy negative", meaning they take more energy to produce than is contained in the final product.

A 2006 report by the U.S. Department Agriculture compared the methodologies used by a number of researchers on this subject and found that the majority of research showed that the energy balance for ethanol is positive.[50] A 2006 study published in Science analyzed six studies, normalizing assumptions for comparison; Pimental and Patzek's studies still showed a net energy loss, while four others showed a net energy gain.[51] Furthermore, fossil fuels also require significant energy inputs which have seldom been accounted for in the past."

So we were both (kinda) correct. In terms of greenhouse gas savings vs. gas, however, corn comes in dead last, at 10-20% savings, as opposed to sugar cane at the top end with 87-96% savings.

I have no opinion on greenhouse gases...IMHO that's so politicized that we'll never know the truth, but I'm skeptical that there would be an environmental net gain with ethanol.

As to net energy... http://www.transportation.anl.gov/pdfs/AF/265.pdf

Actually, there have been more than 10 studies refuting Pimental's conclusions, not to mention the recurring assertion that he just used flawed assumptions and bad science. I agree that there are better substrates than corn. Sugar cane silage, yes, but I'm kind of partial to the switchgrass concept. That's politically dead, probably, because it would do nothing for the farmer.

Jayc
10-17-2007, 06:19 AM
E85 is similar to both LNG and propane. Yes the gas mileage on a standard engine is less but on an engine set up for that fuel it can be almost as good.

The way things are going manufacturers are going to have to put even more research into alternative fuels.

TMCNo1
02-19-2008, 04:34 PM
What was unexpected about this news,

By JOHN WILEN - AP Business Writer
NEW YORK(AP) Oil futures prices have shot back above $100 a barrel for the first time since Jan. 3.
A weekend refinery explosion in Texas and the possibility that OPEC will cut production next month are driving prices higher, although analysts say there isn't a single factor to explain the move.
Light, sweet crude for March delivery has risen as high as $100.10 a barrel on the New York Mercantile Exchange.
The refinery in Big Spring, Texas is owned by Alon USA. It processes nearly 70,000 barrels of oil a day. Officials say it could be closed for as long as two months.

Bruce
02-19-2008, 04:49 PM
I wish they would settle on corn or sugar cane so I would know which to put in the soil bank and get paid for not planting. (no offense to our legitimate farmers)

chudson
02-19-2008, 05:09 PM
Heard about the refinery fire yesterday and called my fuel man and he locked me in at $3.03 diesel full delivered yesterday to the farm in my bulk tank. Filled the truck up yesterday too on the way home, this morning gas was up $.30. You know I would love to see something come in more research on ethanol but I don't believe it's going to happen, there's to much negative going against it. But till it happens I'm going to enjoy selling $4.95 corn (3 years ago it was $ 1.95) and just ride the crest till it breaks.

sdesmond
02-19-2008, 06:30 PM
They use any excuse they can to raise them back up. It was about time they shot back up to over $3.00 a gal. It was lingering around $2.80 by me. I was wandering how long they would let it stay that low.

Jerseydave
02-19-2008, 07:07 PM
Funny how immediately after an explosion, oil spill, hurricane, etc. the oil price goes up before the oil supply stored at refineries is even reduced! Hell, with hurricane Katrina, the price of oil and gas went up before the storm even came to shore!!! (as I recall) OPEC sucks!

chudson, it's about time the farmers get some real money for their crops, even though it's just smoke and mirrors and VERY temporary. Don't go buying a bunch of new equipment on a 30-year note, this wave won't last too long. I remember when I was a teenager my father was selling corn for $3.25/bushel. You guys have been taking a beating for a long time. Grow switchgrass, that's your future crop.