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To: Bearcatbob who wrote (164649)	4/27/2006 8:30:35 AM
From: kech	Read Replies (1) \| Respond to of 794024

Interesting. It is clear that ethanol takes a subsidy when oil is at $30 a barrel. At $75 it does not. Also what is interesting is that the subsidies for corn are price supports so they would disappear if the price of corn increases above some minimum levels. I hear that ethanol producers putting up new plants now have a payback as early as two years given the high price of gas. It will be interesting to see what happens in the next couple of years just from market forces alone. As the cellulose methods for ethanol kick in, it should make ethanol viable even if oil prices fall a lot. But in the meantime, the system investments in E85 distribution could become viable and diffused quickly with the high incentives that exist today.

To: Bearcatbob who wrote (164649)	4/27/2006 8:53:28 AM
From: DMaA	Read Replies (2) \| Respond to of 794024

Here's an ethanol downside I've never read about anywhere: There's one corn (or any alternative crop) harvest per year. All the corn needed to provide feed stock for ethanol all year long comes in at one time. So either you store massive amounts of corn and dole it out over the year, or you convert all the corn to ethanol and store THAT and dole it out over the year. With oil you pump it out as you need it. How inefficient would it be to pump ALL the oil the world needs for the entire year in one month and have to store it.