Talk to someone who's invested in a fuel ethanol plant. Ask them what kind
of profits the plant is generating. Even if you tax the fuel ethanol the
same as you tax gasoline, it can be produced at a considerably lower cost
than gasoline can be produced and marketed from $50 crude, let alone $70
crude.

Brazil will have a hard time making inroads into the fuel ethanol markets in
the interior parts of the U.S. because of transportation costs. They can
have an impact near the costal areas. Most of the fuel ethanol in the U.S.
is produced in the Midwest, the corn belt. The further you have to
transport from the Midwest, the less competitive it becomes. California,
for example, imports a lot of fuel ethanol at relatively high cost,
primarily because of the environmental benefits of mixing it with gasoline
and the fact that they don't have the right crops to produce it themselves.

The oil companies do not favor fuel ethanol (or any other bio-fuel, for that
matter). I wonder why, although I suspect I already know the answer. The
oil industry has been consolidating for a number of years. They've managed
to reduce the number of refineries to the point that they just have enough
refinery capacity to meet current demand (note what happened to gasoline
prices when Katrina took refinery capacity off line). Any large scale fuel
ethanol production will upset their delicate balance and bring more
competition to the oil industry. Obviously, not something they want to see,
considering the amounts of profits they are enjoying under the current
conditions.

For now, corn is the most feasible material to use for fuel ethanol
production in this country. And, by the way, the corn is not lost as an
animal feed just because it's been used to produce fuel ethanol. The
primary byproduct of a fuel ethanol plant is a dried distillers grain, which
is a high protein animal feed. A lot of work is being done to develop
processes to economically produce fuel ethanol from biomass/cellulose, i.e.,
sawdust and such. If that happens (and it will eventually), watch what fuel
ethanol does. Coal fired fuel ethanol plants that meet all environmental
requirements are being built today. If crude prices stay above $35 dollars
a barrel, the fuel ethanol plants will do fine. We need to let the
marketplace decide if fuel ethanol is feasible.

Harry


"Richard J Kinch" wrote in message
.. .
Rich256 writes:

I would still like to see a valid study showing that ethanol is a valid
alternative to gasoline.

Ethanol is physically inferior and more costly than gasoline. The support
for it is political, and not just the farmers.

Some believe that we are better off making something ourselves than
importing something better and cheaper. This is why you hear all the
rhetoric about "dependency of foreign oil". By that logic, we are better
off burning domestic candles than importing sunlight:

http://bastiat.org/en/petition.html