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Non-Tech : $2 or higher gas - Can ethanol make a comeback? -- Ignore unavailable to you. Want to Upgrade?

To: Lance Bredvold who wrote (2337)	2/25/2007 9:19:08 AM
From: Ish	Read Replies (1) \| Respond to of 2801

<<To do the calculation you seem to be trying to accomplish, you should divide $3.00 by 2.7 gals per bushel. Cost of corn to make a gallon of ethanol is more like $1.11.>> Plus only the starch is used, the protein feed part and the oil do not go into making ethanol. I hear a lot of crap how ethanol is making the price of corn so high people are starving. How about drought in China and Australia have turned them into corn importing nations that had been exporting nations?

To: Lance Bredvold who wrote (2337)	2/25/2007 3:00:17 PM
From: Think4Yourself	Respond to of 2801

Whoops, my bad. Thank you for pointing that out. It's been awhile since I looked at the conversions and I was wondering why the cost numbers seemed even higher than I remembered. So that means the food input is $1.10 per gallon now and currently projected to be $1.39 per gallon by mid 2009. Multiplying by 1.15 to convert calories from ethanol to gasoline gives $1.26 and $2.08 for the primary input. There may be some room for profit at these prices. The number of ethanol plants coming online suggests they will run as long as they can get any profit, implying corn prices will go higher as more plants come online and start buying corn feedstocks. RichardRed has pointed out that Ethanol is being substituted for MTBE. Although most analysis (not sponsored by the ethanol industry) says ethanol is not a solution for our energy problems, it is most definitely a good fit for MTBE substitution.