Wall Street Journal Falsely Claims Ethanol is Responsible for High Gasoline Prices
Wall Street Journal Falsely Claims Ethanol is Responsible for High Gasoline Prices
Is clean-burning, domestically-produced ethanol the reason that gas prices are topping $3 per gallon? That’s what Big Oil and the Wall Street Journal (WSJ) are saying. From Monday’s WSJ:
Demand for ethanol as an additive has caused its price to soar about 65% since early May to around $4.50 a gallon in U.S. spot markets, according to the Oil Price Information Service. That makes it far more expensive than gasoline, which costs about $2.90 a gallon at the pump on average, according to the AAA driving club. … “We’d probably have retail gasoline prices between $2.30 and $2.40 a gallon if not for ethanol,” estimates economist James Glassman of J.P. Morgan.
Actually, ethanol is reducing the price of gasoline. Here’s why:
1. Ethanol is a liquid fuel that displaces 2 percent – or 4 billion gallons – of the transportation fuel market. That’s four billion gallons of fuel that is not petroleum based – which is good news with oil selling over $70 per barrel.
2. Ethanol’s high octane rating means that less crude oil is used in the refining process to generate higher octane gasoline. A conservative estimate would suggest that ethanol extends the supply of clean-burning, high octane gas and increase the volumes of finished gasoline by as much as 10 percent.
3. 85 percent of ethanol is sold on long-term, fixed price contracts – the average price for existing contracts at the moment is between $2.00 and $2.50 per gallon – not on spot market prices that the Journal cites.
Bottom line? If we did not have the more than four billion gallons of ethanol to extend our limited gasoline supplies, prices at the pump would be even higher than they are now.
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Ya right….
The reason Gas is expensive, is because the 6 CEO’s of big OIL, I.M. each other every morning and set the price.
June 22nd, 2006 at 4:01 pmThis is typical of the gas industry. Their profits keep rising and rising at a rate FAR greater than simlpy suply and demand, or cost per barrel can account for. And when you try and reduce the demand on oil…well, the prices rises anyway.
The fact is that the oil companies have given in to absolute greed and the power they have over us right now. The only way to put them in their place is to provide MORE choice for consumers and push altenative fuels.
June 22nd, 2006 at 4:03 pmWhy does a site like this support ethanol? Using E85 produces Co2 emissions just like Oil. You are simply replacing one polluting substance with another.
June 22nd, 2006 at 4:07 pmYou mean that Big Oil and the WSJ are saying one thing when the EXACT OPPOSITE is true? Hmm. That sounds familiar.
June 22nd, 2006 at 4:11 pmbecause when you burn Octane (gas), then you produce the 8 X the CO2 and consume 9 times the oxygen, required to burn the same volume of ethanol
June 22nd, 2006 at 4:15 pmIt’s actually a misconception to state that ethanol is carbon intensive. Studies by NRDC, Oakridge Labratories and Argonne National Laboratories all find that cellulosic ethanol dramatically reduces greenhouse gas outputs.
NRDC
Many new and innovative corn ethanol plants are also poised to make significant carbon savings.
June 22nd, 2006 at 4:19 pmE3 Biofuels
Could they have been refering to the price spike that is just starting to end ? The one that was caused by a shortage of ethanol due to it now being required in gas instead of the other additive they used to use?
June 22nd, 2006 at 4:20 pmEthanol will propaply be pushed by our congress more since it gives a nice reach around to there respective bases. Sasdly, Ethanol is heavily substidized or it wouldn’t even make a profit. Sure Big Oil gets government money as well, but that is just washington being corrupt since Big Oil will make a profit regardless. Ethanol plants around my home state (Minnesota) are big problems for the locals and there aquafers. There was some study last week that said the local ethanol plant uses over 2 million gallons of water a month. The county is concerned that the plant will dry up its aquafer. Also, to all you Left coast guys that aviod us in fly between country. Ethonal plants are the most disgusting places you could find. The smell they produce is noxious miles away from the plant. They are royal polluters in an area of the world that doesn’t normally have much pollution unlike all those places like LA that house the environmentalists.
June 22nd, 2006 at 4:28 pm“You’re actually going to restate the claim that’s already been debunked by the thread itself?”
The thread didn’t cover anything about the spike in ethanol demand caused by the force over from the other additive to just ethanol.
June 22nd, 2006 at 4:32 pmActually let me elaborate:
when you burn octane (gas) this is the equation:
2 C8H18 + 25 O2 –> 16 CO2 +18 H20
when you burn ethanol:
2 C2H6O + 6 O2 –>
4 CO2+ 6 H2O
So basically you are consuming 1/4 the oxygen and producing 1/4 the CO2 when you burn one molecule of ethanol instead of burning one molecule of octane (gas)
Now that is a significant reduction in polution
June 22nd, 2006 at 4:33 pmAnd hey, all the drunks can siphon the ethanol and drink it, you think its funny, just wait.
June 22nd, 2006 at 4:36 pmIf they are not careful, the number of reasons for high gas prices are going to top Bush’s 25 reasons for going to war in Iraq.
June 22nd, 2006 at 4:45 pmBilly,
Ethanol plants consume LOTS of coal and/or oil, either directly and/or by electricity consumed (usually coal fired.) and therefore are EXTREMELY heavy polluters, more than outweighing the offset reduction from emissions.
Your propaganda won’t fly here.
Check this: http://www.energyjustice.net/ethanol/factsheet.html
Ethanol production is very energy intensive, requiring mini-power plants just to produce the steam they need. Some proposed ethanol plants have sought to locate next to existing trash incinerators, waste coal power plants or other industries capable of sharing steam with their new industrial neighbors. This may save energy, but it results in the concentrating of polluting industries in already poisoned communities.
and
hundreds of complaints at the Gopher State Ethanol plant in St. Paul, where residents complained that the plant smelled like “rubbing alcohol mixed with burning corn,” the Minnesota Pollution Control Agency began testing emissions from the plant. They found high levels of carbon monoxide, methanol, toluene and other Volatile Organic Compounds, including formaldehyde and acetaldehyde, both of which are known to cause cancer in animals.
Mmmm, sounds GREAT for the envrionment…
June 22nd, 2006 at 4:55 pmEthanol is a joke. Not because it is a pollutant but because it takes approximately four times the amount of petrochemicals to produce and market than petroleum. Big oil loves ethanol because they’ll make even more money than they’re making now and a very limited resource will be depleted even faster than it already is. What people have to get off of is the internal combustion habit.
June 22nd, 2006 at 5:12 pmDoes anyone really think they are going to hear the truth from “Big Oil” Execs? The American public never ceases to amaze me.
June 22nd, 2006 at 5:21 pmI would like it if zoning laws did allow for wind generators, and solor panels. If every house in this country had one or both, I wonder how much our electricity demand would go down?
June 22nd, 2006 at 5:37 pmbtru-
June 22nd, 2006 at 6:29 pmAre you serious? Wikipedia is nice for a high school book report, but I’m not going to rely on it as scientific fact. Check back on that entry in another month, and you’ll find the exact opposite viewpoint. Funny though.
Sorry mid-westerners, ethanol is a ruse. Sell your corn to the corn syrup makers for more generic soda.
And quit spouting off (That link you cited is just ridulous, from a number of standpoints) without substantiating your point (as usual.)
AND (btru), lay off the condescending tone you prick. I have a Bachelor of Science degree, flunkie.
June 22nd, 2006 at 6:37 pmHow’s the trade school?
I quit reading,,,listening….pondering ……any info. coming from the Wall street
June 22nd, 2006 at 7:14 pmJournal……………………..along time ago
btruthless is obviously unaware that the assertion he/she/it made, that my post, which was ANTI ethanol, must but Big Oil propaganda? Hey, dumbass, the oil industry is welcoming ethanol, why would they sponser ANTI ethanol propaganda? Hello-o-o-o-o.
Serious btru, what level of uneducation DO you have??? Are you even in high school yet?
I’ve got some coloring books on environmentalism and some pretty crayons, if it would help.
June 22nd, 2006 at 9:35 pmYou also forgot the fact that Bush signed an Executive order banning seasonal blends from gasoline around six weeks ago.
June 22nd, 2006 at 9:52 pmThere are no pollution reducing such as Ethanol in our gasoline today, therefore it is impossible for Ethanol to be raising gasoline prices.
Folks (especially B. Gant) – a little sanity when we try to calculate the amount of CO2 produced for ethanol versus gasoline please. The statement that ethanol produces one quarter the amount of CO2 is false. Proof is below. All quoted numbers are from the Chemical Engineers Handbook.
Although incorrect, we can assume for the sake of discussion that gasoline is 100% n-octane.
1 gallon of ethanol weighs 6.6 lbs and contains 0.1467 lb-mols of ethanol. This will produce 0.2934 lb-mols of CO2 on complete combustion. That’s 2 moles CO2 for every mole of ethanol.
1 gallon of n-C8 weighs 5.86 lbs, contains 0.0514 lb-mol and will produce 0.4112 lb-mols of CO2 on complete combustion. That’s 8 moles of CO2 for every mole of octane.
So on the surface, octane does produce about 40% more CO2 than ethanol for every gallon consumed.
But don’t forget that the heat of combustion of octane is 40% greater than the heat of combustion of ethanol (ethanol: 86863 BTU/gal, n-octane: 121577 BTU/gal). It all balances out. For every mile you drive (assuming equivalent engine efficiency), you produce the same number of lb-mols of CO2 whether you burn octane (gasoline) or ethanol.
Thermodynamics can be misleading when applied incorrectly. Please consult a professional!
June 22nd, 2006 at 11:29 pmThank You Thermo Guy!
June 22nd, 2006 at 11:44 pmLiberals who have fallen for the Corn As Ethanol movement are chumps.
Open. Your. Eyes.
To produce one gallon of ethanol, one has to burn 6 gallons of diesel fuel. The energy derived from that gallon of ethanol is LESS than the energy used to produce it.
The only reason ethanol exists is that the corporate farm lobby is so strong.
ETHANOL IS NOT THE ANSWER. READ UP. Any “green” liberal would be foolish to support ethanol, at least in its current form of production.
June 23rd, 2006 at 2:00 amaqueos phase reactions
If you burn ethanol (E-85), expect twenty-five percent less in actual mileage. Less power, too.
At 2.35 per gallon, and twenty-five percent less mileage, it’s a wash. Might even cost you more.
It isn’t as good as gasoline. The pumps are dry of E-85 around here. There is none to be had. All of the E-85 is heading of to the east and west coasts.
Gasoline is a better bargain. Just don’t buy as much. Quit driving so much.
June 23rd, 2006 at 9:09 am