On Apr 8, 8:44 am, wrote:

I heard a blurb on NPR the other day that it's mandated
by the feds for the summer to lessen polution.

There seems to be so many misinformation about ethanol in fuel. A
little Google search shows:

* ethanol was first introduced in larger scale in gasoline as an
oxygenate back in 1990s, the RFG program, to reduce the CO emission
mostly in winter in some metro areas. On carburated auto engines
ethanol has the effect of leaning out the mixture - hence reducing the
CO emission especially when the engine is cold. This effect is mostly
irrelevant now that vast majority of the cars have electronic ignition
and automatic mixture control.

* The oil companies didn't like ethanol because 1. it can't be
transported in pipelines and 2. they didn't control its production.
They prefer MTBE, an oxygenate produced from petroleum. EPA at the
time didn't care whether MTBE and ethanol is being used.

* MTBE was later found to be contaminating ground water, and the
congress in 2005(6?) denied MTBE producer's request for a liability
waver. As a result, MTBE as an oxygenate was completely phased out
about two years ago and all areas designated as "non-attainment" areas
by EPA must use ethanol as oxygenate, which triggered the first large
scale shortage of ethanol and a big price run-up.

* In the mean time, some states have passed various laws mandating
ethanol blending in gasoline. The exact requirement can be very
different from state to state.

* In 2004, Congress passed the law to give 51 cent per gallon subsidy
for pure ethanol (and proportional tax credit for various % of blend).

* In 2007, Congress passed the law (and Bush signed it) to require a
rapidly increase of renewable fuel by 2022 (See
http://www.ethanol.org/index.php?id=78&parentid=26 for the schedule).
For the first few years this would come almost entirely from corn
ethanol. This misguided effort resulted in a huge increase of corn
price, food price - particular meats, and ethanol price in 2007 when
20% of the entire U.S. corn production was turned into ethanol - which
was merely the first year of the schedule (see
http://news.google.com/news?hl=en&ne...G=Search+News).
Interestingly enough, even with 51c a gallon tax credit ethanol
producers have been barely turning a profit lately due to this huge
run-up of corn price, and this is merely the beginning. To produce 15
billion gallons of corn ethanol a year it would probably require more
than 50% of the entire U.S. corn harvest, a situation that's highly
unlikely to occur. If you think $3/dozen eggs is expensive, imagine
$10/dozen eggs - that's what'll happen if we produce anywhere near 15
billion gallons of corn ethanol a year.

* Even though the 2007 law requires a massive increase of ethanol
blending in gasoline, it didn't exactly specify that each gallon of
gasoline must contain certain percentage of ethanol. The oil
companies are free to blend ethanol in some areas and not other
areas , or to blend in regular gas but not premium, etc, etc -
subject to state by state regulations.


My point is? This ethanol madness totally sucks, but the hard reality
has begun to set in. Just wait for another year when the food price
totally shoot through the roof, something will change. I have already
seen the news coverage regarding corn ethanol turning largely negative
in the last month or so.