Possibly some good news for future oil prices

[wheelsup]

Chrysler expanding ethanol model line

E85 mixture requires less gas in ‘flex-fuel’ vehicles

By Sholnn Freeman
Updated: 2:18 a.m. ET April 26, 2006

DaimlerChrysler AG pledged to build 500,000 ethanol-fuel vehicles annually, or a quarter of its U.S. production, by 2008, as automakers try to address concerns over heavy foreign oil consumption and high gas prices.

Thomas W. LaSorda, chief executive of Chrysler, made the pledge yesterday at a meeting of the Renewable Fuels Association in Washington, where President Bush announced measures aimed at reducing the country's dependence on foreign oil. He encouraged production of ethanol-powered cars and gasoline-electric hybrid vehicles. (EDIT (me): why not ethanol-electrics???)

Bush and some lawmakers have promoted ethanol as a way to trim imports of oil and help farmers. Ford Motor Co., General Motors Corp. and LaSorda's Chrysler division have 4.5 million vehicles on the road capable of using the fuel E85, a mixture of 85 percent ethanol and 15 percent gasoline. The fuel is meant for use only in some "flex-fuel" vehicles built to accommodate either regular unleaded gasoline or other blends.

Ethanol is an alcohol-based gas additive. In the United States, it's derived largely from corn. To equip vehicles to use the additive, automakers have to harden components in the fuel system with stronger materials to protect against the fuel's corrosive effects. The upgrade during the manufacturing process can cost automakers less than $500.

Automakers are pushing hard to expand production of vehicles that use the fuel. Ford is expected this year to build 250,000 vehicles capable of operating on E85, and GM is to turn out 400,000 E85 vehicles in 2006 and 500,000 next year.

But the automakers said they need more stations that offer the ethanol-gas blend. Of the 180,000 gasoline stations nationwide, an estimated 600 sell E85. LaSorda yesterday called on the automakers, oil companies and government officials (EDIT (me): they tried this in Brazil and it didn't work the first time - leave government out of it IMO) to team up to expand the number of ethanol stations. Michigan, for example, has six ethanol fueling stations, he said. And many locations charge more for E85 than for gasoline, even though the fuel carries cars fewer miles.

In January, Ford announced a partnership with VeraSun Energy Corp. of Brookings, S.D., to increase the number of ethanol fueling stations in the Midwest. Ford, through the partnership, is helping to underwrite the addition of 20 fueling stations in Illinois, 30 in Missouri and six in Iowa. A company spokesman said the automaker plans to have more than 60 stations in the United States over the next few years.

‘More confident’
Chris Preuss, a GM spokesman, said the automaker is having "many active discussions" with the Bush administration and with members of Congress to develop a strategy for ethanol. "We're looking at what it would take to move beyond" the production levels already in place. "As the trend continues, we become more confident," he said.

As part of yesterday's announcement, LaSorda said the Chrysler would add the Jeep Grand Cherokee and the Jeep Commander to the list of vehicles that would be powered by ethanol.

The ethanol business is booming. There are 34 plants under construction, according to the Renewable Fuels Association, a District-based industry trade group. Eight of the 95 existing plants are expanding. And 150 more new plants or expansions are in the planning stages. The activity is concentrated in the Midwest, where much of the nation's corn is produced. The United States last year consumed an estimated 4 billion gallons of ethanol, compared with 140 billion gallons of gasoline. (EDIT (me): I watched PEIX stock, an ethanol production company in Cali, go from $23 to $33 in several weeks! I think there may be some opportunity here)

The ethanol industry also has gotten a boost from requirements in federal energy legislation approved last year that requires an increasing amount of the additive to be used. Some studies peg the federal ethanol subsidy at $3 billion per year.

LaSorda said Brazil has pursued a flex fuel policy since the Middle East oil embargo of the late 1970s, using excess sugarcane instead of corn. He added that a big investment in a flex-fuel infrastructure could pay off in the United States.

"Brazil expects to be energy independent by the end of this year," LaSorda said. "If Brazil can do it, why can't the richest, most technologically advanced country in the world do it?"

If we can ramp up production of ethanol, and become totally independent on oil importants, the health of the economy would grow greatly IMO, even if it meant paying $4.00/gal-$5.00/gal or more for ethanol fuels. I would gladly do that if it meant that all of the income stayed here in America. The US (and canada) still is able to produce oil for other things, such as Jet-A, diesel, plastics, etc.

 

[n57flyguy]

Yeah, I can agree with some of that. I think the problem will be that it will take a long time to make the transition. It will be a while before everyone gets rid of thier gasoline car and just switch, It would be nice though. Personnally I think soy disel would be a much better option. Its renewable, cleaner and would provide a huge economy boost. Ethol would also because of corn, but I think Ethol is cheaper that soy D, or around the same price. I would also glady pay for Ethol or Soy D to "buy American" and support the economy. I agree with you also that using Oil to produce Jet-A, Av Gas, Plastics, etc would be fine, but again the main problem would be the transition from Gasoline to Ethol. Great post.

 

[flyover]

Problem is corn is not the best way to get ethanol. Sugar cane is.

But for years ethanol has been pushed as a way to help American farmers. So right now there is a huge tariff on imported ethanol, to insure that only domestically produced ethanol is used.

If ethanol is going to really be a player we need to open up and allow it to be imported, unrestricted.

Also we need to remember that government makes about 4 times as much in taxes on gasoline as the people that sell the product. Which is why they want to divert attention and investigate "gouging". Don't look at the man behind the curtain.

Another great story is that Mexico is reported to have discovered a huge oil field off of the Yucatan. For decades now the news has been that oil will soon be depleted. Yet today we have more known reserves than at any time in human history, and they keep increasing. Go figure.

Another encouraging item. Adjusted for inflation the price of crude oil peaked in 1979 at $98 a barrel. We are still well off of that high and the economy of the US and the world is in much better shape to withstand high oil prices. So it's not time to panic, at all, over crude oil or gasoline prices.

 

[caliginousface]

So...how much more land are you going to cultivate to produce ethanol?

 

[wheelsup]

So...how much more land are you going to cultivate to produce ethanol?

Yeah, there are certainly MAJOR short comings.

I think the answer lies in Cellulosic Ethanol - a canadian company (can't find the article now) is on the verge of a breakthrough with this stuff. They have turned waste products into ethanol cheaper than the corn and soybean stuff. Can you imagine, instead of just corn and soybeans, using everything from grass clippings to tree bark to make fuel?

Keep in mind Ford's model T was originally designed to run on enthanol until oil was found to be cheaper.

[FONT=Arial, Helvetica, sans-serif]Creating Cellulosic Ethanol: Spinning Straw into Fuel[/FONT]

[FONT=Arial, Helvetica, sans-serif]by Diane Greer
April, 2005[/FONT]
[FONT=Arial, Helvetica, sans-serif][/FONT]
[FONT=Arial, Helvetica, sans-serif]In the Grimm Brother's fairy tale, Rumpelstiltskin spins straw into gold. Thanks to advances in biotechnology, researchers can now transform straw, and other plant wastes, into "green" gold - cellulosic ethanol. While chemically identical to ethanol produced from corn or soybeans, cellulose ethanol exhibits a net energy content three times higher than corn ethanol and emits a low net level of greenhouse gases. Recent technological developments are not only improving yields but also driving down production cost, bringing us nearer to the day when cellulosic ethanol could replace expensive, imported "black gold" with a sustainable, domestically produced biofuel.[/FONT]


[FONT=Arial, Helvetica, sans-serif]Cellulosic ethanol has the potential to substantially reduce our consumption of gasoline. "It is at least as likely as hydrogen to be an energy carrier of choice for a sustainable transportation sector," say the National Resources Defense Council (NRDC) and the Union of Concerned Scientists in a joint statement. Major companies and research organizations are also realizing the potential. Shell Oil has predicted "the global market for biofuels such as cellulosic ethanol will grow to exceed $10 billion by 2012." A recent study funded by the Energy Foundation and the National Commission on Energy Policy, entitled "Growing Energy: How Biofuels Can Help End America's Oil Dependence", concluded "biofuels coupled with vehicle efficiency and smart growth could reduce the oil dependency of our transportation sector by two-thirds by 2050 in a sustainable way."[/FONT]
...

[FONT=Arial, Helvetica, sans-serif]Cellulosic ethanol can be produced from a wide variety of cellulosic biomass feedstocks including agricultural plant wastes (corn stover, cereal straws, sugarcane bagasse), plant wastes from industrial processes (sawdust, paper pulp) and energy crops grown specifically for fuel production, such as switchgrass. Cellulosic biomass is composed of cellulose, hemicellulose and lignin, with smaller amounts of proteins, lipids (fats, waxes and oils) and ash. Roughly, two-thirds of the dry mass of cellulosic materials are present as cellulose and hemicellulose. Lignin makes up the bulk of the remaining dry mass.[/FONT]

For the rest of the (long) article, go here. It talks about how much land is needed to fulfill the US's need for fuel later on in the article. Can you imagine a new energy policy that relies upon clean air and soil to increase the production of fuel (more fertile land, sunny skies, etc.)? Brazil has overcome it's dependence on oil mainly because sugar cane produces approximately 10x the energy that corn ethanol produces - so the US is at a significant disadvantage when it comes to that.

I, for one, hope there is a future. Apparently Bill Gates does to, he invested $84 million into Pacific Ethanol (USEIX) which is partly the reason their stock prices have doubled in the past month or two.

 

[Texasspilot]

Don't care...if corn or soybean prices go up..I win. My 200 acres is a growin

As for e85 I believe its like 20% gas and 80 ethanol. In order to run it you need stainless steel fuel lines and a specially lined gas can(gas can...not keystone can I believe most people can expect 30% less MPG with E85 than with conventional gasoline.

 

[wheelsup]

Don't care...if corn or soybean prices go up..I win. My 200 acres is a growin

As for e85 I believe its like 20% gas and 80 ethanol. In order to run it you need stainless steel fuel lines and a specially lined gas can(gas can...not keystone can I believe most people can expect 30% less MPG with E85 than with conventional gasoline.

My grandfather owns a boatload of land in South Carolina - he used to grow soybeans on it until he retired. Hopefully it stays in the family .

e85 is just what it suggests - 85% ethanol and 15% gasoline. I have no idea why it cannot be made to 100% ethanol, yet. I haven't come across an article addressing it.

The upgrades to a new car are under $500. A pretty low investment considering to equip hybrids it costs thousands more. I don't know what the retrofit for older cars would cost, however. Of course, by the time E85 becomes mainstream hopefully 100% of the cars produced/imported here in the US would have been made to accomidate E85, which would mean even older, used cars will have the technology in them.

E85 is about 30% less MPG to produce the same horsepower. If we could get away from our craze for zero-to-60 times or V-10 Excursions cars could be made smaller with less of a need for the bigger engines. Look what kinds of cars are in europe - you hardly see SUV's over there (with gas prices the equivilant of around $8.50/gal!!!).

I don't know if ethanol is the answer, but I think it's fun to think about the possibility of getting rid of OPEC!

 

[flyover]

Can you imagine a new energy policy that relies upon clean air and soil to increase the production of fuel (more fertile land, sunny skies, etc.)?

I agree that technology is going to be the key. The ethanol from corn thing has real problems. But finding ways to use all kinds of bio-mass would be a different matter.

But hold on to your "clean air and soil" cap. There are significant enviornmental issues with agriculture. And creating more demand for agricultural production, will likely mean more erosion, depleted soil, chemical pollution, etc. etc. Don't worry, the enviornmentalists (who really want us all riding bikes like the North Koreans) will be sure to fill you in.

 

[derg]

I think the lack of progression has less to do with environmental concerns than it does basic, all-American money.

We're a country run on oil. The economy teeters on it's supply, billions of dollars are invested in petroleum companies and large parts of our government are people involved with the petroleum industry.

We'd basically be threatening the core of people with the most political and economic capital and they're going to defend that.

If you think the Kennedy clan holds steadfast to political power in the country, just wait until the push for a viable alternative fuel becomes the "New Manhattan Project". Not only are you going to have the oil companies flipping out, you're going to have entire regimes in the middle east itching.

We have a lot less to fear from the unshaven guy that reeks of patchooli oil with the Tevas on telling me about how he wants to marry a tree than we do Emirs, Petroleum CEO's and politicians with oil-based legacies.

Just my humble opinion and I might be wrong. I'm just a pilot!

 

[flyover]

We have a lot less to fear from the unshaven guy that reeks of patchooli oil with the Tevas on telling me about how he wants to marry a tree than we do Emirs, Petroleum CEO's and politicians with oil-based legacies.

You could be right. Although, none of these guys who have made their fortunes supplying energy is likely to ignore market realities and let others take control. In other words, they'll be investing in any technology that can make them money going forward. And of course they well know that the higher the price of oil goes, the more viable alternatives become and the faster we move toward them. Like one of the top analysts said, the fastest way to get to $20 a barrel oil is for it to hit $100 a barrel.

But that doesn't erase the fact that much of the environmental movement is aligned with and cross-pollinated with socialists and communists. It's just the way it is.

 

[flyover]

Let's hear from somebody who really knows some stuff, Popular Mechanics:

http://www.popularmechanics.com/science/earth/2690341.html

Looks like the winner, going away, might be electric or gas/electric hybrids and start digging that coal baby!

 

[RynoB]

You all are forgetting about bio-diesel. Early tests and production show that it can be produced much cheaper, and cleaner than ethanol. It can be produced from canola oil, and byproducts of wheat, such as the wheat straw left behind after harvest. Some think that bio-diesel plants can be made small enough that farmers can put them on their own farms, to produce their own fuel, for their tractors and trucks. No modifications will have to be made to a diesel engine to run bio-diesel. Jet-A, to put simply, is a high grade deisel. If bio-diesel is as good as some of the researchers say, then Jet-A could possibly be produced in this manner as well. Willie Nelson has his own bio-deisel plant, called Bio Willie. If bio-diesel works, it will be the wave of the future IMHO.

 

[wheelsup]

If bio-diesel works, it will be the wave of the future IMHO.

Reading through that PM article biodiesel seems to be pretty nifty. There's also an article on 321energy.com about turning coal into gas and diesel - apparently the US has enough reserves right now for about 300 years of it.

I personally like the idea of an all electric car. I saw there was a geo metro sold on ebay that was all electric. With a range of 100-120 miles per charge (per the PM article) using these cars for an everyday commuter car would be perfect for the masses IMO. Heck, I'd spend $15k-$20k on a car that requires no gas what so ever if I drove 30, 40, 50 miles each way per day. Imagine what that would do for the US's oil usage...it would plummet! Not only that but air quality would increase considerably, etc.

I suppose there is hope for us, hopefully the airlines can survive this spike in energy costs and it will provoke everyday people to once and for all see that dependency on something that a small group of countries provide is a bad thing.

 

[skyhawk39]

Sorry to hijack a bit but....

I actually run alternative diesel (not bio diesel) in my vehicle (Dodge Cummings Turbo Diesel). I obtain the cooking oil from a local resturant and blend it in my garage. Total system cost me about $250 to build with items from home depot, no conversion for the vehicle, etc.... I figure that now that I have paid off the initial construction items with self-fueling I am actually paying about .30 cents a gallon for it.

It runs really clean and quiet (a lot quieter than low-sulfur diesel) and smells like asian food out the exhaust.

And yes, just to see if it would work we ran it in a PT6 turbine on a static bench test in the family shop awhile back and it ran....

www.dieselsecret.com - For anyone interested

 

[flyover]

It runs really clean and quiet (a lot quieter than low-sulfur diesel) and smells like asian food out the exhaust.

And yes, just to see if it would work we ran it in a PT6 turbine on a static bench test in the family shop awhile back and it ran....

This is all coming together. We can get over our collective guilt about fried food by joining the cause of energy independence.

 

[RynoB]

This is all coming together. We can get over our collective guilt about fried food by joining the cause of energy independence.

Yes, maybe KFC will add extra greasy as an option :nana2:

 

[PanJet]

I think the lack of progression has less to do with environmental concerns than it does basic, all-American money.

We're a country run on oil. The economy teeters on it's supply, billions of dollars are invested in petroleum companies and large parts of our government are people involved with the petroleum industry.

We'd basically be threatening the core of people with the most political and economic capital and they're going to defend that.

If you think the Kennedy clan holds steadfast to political power in the country, just wait until the push for a viable alternative fuel becomes the "New Manhattan Project". Not only are you going to have the oil companies flipping out, you're going to have entire regimes in the middle east itching.

We have a lot less to fear from the unshaven guy that reeks of patchooli oil with the Tevas on telling me about how he wants to marry a tree than we do Emirs, Petroleum CEO's and politicians with oil-based legacies.

Just my humble opinion and I might be wrong. I'm just a pilot!

Switching from a country run on oil to a country run on biodiesel and ethanol would not necessarily destroy the economy. It would switch it back to a more agriculturally based economy like the country used to be before urbanization.

Believe it or not, agrilculture has become a highly sophisticated, highly technological industry. I grew up in the agricultural world, and some of the systems they have now are intensly technological. There are systems in tractors nowdays that make your average BMW look rather insignificant.

Besides, if our energy source switched to bioenergy produced by American's, the economy would get stronger with less money going overseas.

I believe most people can expect 30% less MPG with E85 than with conventional gasoline.

True, but E85 fuel is generally a lot cheaper than regular gas. I purchased some in northern ND and MN last fall that was about $1.40/gallon while gas was about $2.20/gallon.

I agree that technology is going to be the key. The ethanol from corn thing has real problems. But finding ways to use all kinds of bio-mass would be a different matter.

But hold on to your "clean air and soil" cap. There are significant enviornmental issues with agriculture. And creating more demand for agricultural production, will likely mean more erosion, depleted soil, chemical pollution, etc. etc. Don't worry, the enviornmentalists (who really want us all riding bikes like the North Koreans) will be sure to fill you in.

Environmentalists claims about agricultural pollution are so unfounded. Farmers are constantly trying to improve issues dealing with erosion, chemical pollution (if you can really call it that), etc. As far as pollution by equipment, etc., I think you'll find that agriculture produces a miniscule amount of pollution compared to cars in a city. Just drive across North Dakota or Montana where there is millions of acres of farmland, yet fewer people (in both states combined) than even a smaller city like Portland, OR. Granted there are about 2 vehicles for every person in the state of Montana, not including farm equipment, but even that doesn't even come close to the amount of polluting vehicles there are in a city say as large as Minneapolis or Seattle or larger, not to mention it's spread out across the fourth largest state in the union.

You all are forgetting about bio-diesel. Early tests and production show that it can be produced much cheaper, and cleaner than ethanol. It can be produced from canola oil, and byproducts of wheat, such as the wheat straw left behind after harvest. Some think that bio-diesel plants can be made small enough that farmers can put them on their own farms, to produce their own fuel, for their tractors and trucks. No modifications will have to be made to a diesel engine to run bio-diesel. Jet-A, to put simply, is a high grade deisel. If bio-diesel is as good as some of the researchers say, then Jet-A could possibly be produced in this manner as well. Willie Nelson has his own bio-deisel plant, called Bio Willie. If bio-diesel works, it will be the wave of the future IMHO.

:yeahthat:

 

[RynoB]

Here is a good Website for biodiesel info.
http://www.biodiesel.org/resources/biodiesel_basics/default.shtm

 

[tonyw]

Ain't nothing wrong with riding bikes, Flyover.

We solve two problems at one time. We reduce our consumption of gas and we also address the growing (heh heh heh) obesity problem.

We reduce waste and waist at the same time!

 

[kellwolf]

I personally like the idea of an all electric car. I saw there was a geo metro sold on ebay that was all electric. With a range of 100-120 miles per charge (per the PM article) using these cars for an everyday commuter car would be perfect for the masses IMO. Heck, I'd spend $15k-$20k on a car that requires no gas what so ever if I drove 30, 40, 50 miles each way per day. Imagine what that would do for the US's oil usage...it would plummet! Not only that but air quality would increase considerably, etc.

The only thing I can see wrong with this is it depends on where the energy to charge the car comes from. If it's from a nuclear plant, cool. If it's from a plant tied to oil, then you may have reduced your usage of oil but not eliminated it. Add to that charging times, etc. If it takes almost a day to fully charge the car, then it might be kind of a pain. Then again, driving it every other day would probably be better than driving a gas powered car everyday.

Not saying it's a bad idea, just playing a bit of devil's advocate.