Howdy from Chicago, where I am teaching for the Illinois News Broadcasters Association this weekend.
The mo-ped and its larger cousin, the scooter, are making a huge comeback during these days of rising gas prices. The Christian Science Monitor reports:
To be sure, U.S. sales of small-bore cycles aren't yet at their peak -- 300,000 units in 1978. But sales are up 500 percent since 1999, and rose from 83,000 units sold in 2004 to 130,000 in 2005, according to the Motorcycle Industry Council. A new mo-ped starts at $1,000, and fancy scooters go for more than $5,000. What distinguishes the scooter from the motorcycle is mainly its small-bore engine and small-diameter tires.
In fact, the tattered denim jackets and faux toughness of mo-ped enthusiasts are boldly tongue-in-cheek, open invitations to small-bore envy. While the age of the average scooter owner has nearly doubled in the past five years to over 40, cultural experts credit mo-peds' acceptance to the cachet of the kids, who often travel in packs.
All About Ethanol
President Bush this week encouraged the expanded use of ethanol as a way to become more energy-independent. You should remember that ethanol products are usually just as expensive as non-ethanol products, and sometimes more expensive. But the big knock against it is that you will probably get fewer miles per gallon. With E-85 ethanol, mileage per gallon is reported to be significant (at least 25 percent) lower.
But ethanol supporters say say that is the wrong way to look at it. Look at it as an issue of the cost per mile traveled, they say, and ethanol compares well.
Four states -- Washington, Minnesota, Montana and Hawaii -- have state laws requiring a certain percentage of all fuel sold be ethanol-based. Several state legislatures are considering similar bills right now. It is interesting that the states that have passed such legislation are not the big corn-growing states you would expect. [PDF]
There has been a parade of articles this week about how ethanol is not the cure-all of the energy problem. BusinessWeek points out that this rush to ethanol is familiar ground. There were similar rushes in 1974 and 1979. Within five years of the first Arab oil embargo, 163 ethanol plants were running. But, after a while, only 74 of them were still in operation. The reason is that in the 1980s, the price of oil dropped -- and so did interest in ethanol. BusinessWeek says that if the feds hadn't propped up the ethanol industry with tax breaks, the entire industry might not have survived.
But now, new plants are under construction. Here is an announcement about ground-breaking for a new plant in Iowa next week.
U.S. News and World Report answers all your ethanol questions. U.S. News also evaluates all of the alternative fuels in a sidebar piece.
A Chicago Tribune editorial explains how ethanol is partly behind the big rise in gasoline prices.
Ethanol is billed as a locally produced fuel (it comes from corn) that cuts down on our consumption of foreign oil. But here's how ethanol policy actually drives up the cost of gas.
As a gift to the ethanol lobby, Congress last summer mandated a near doubling in the use of ethanol in gasoline by 2012, to 7.5 billion gallons a year from today's 4 billion gallons.
Ethanol is an oxygenate that reduces pollution (though gas refiners insist they have figured out a way to cut pollution without it). Congress required more ethanol use at a time when the country is moving away from the only other oxygenate on the market, MTBE, because it has been found to contaminate ground water.
So ethanol producers are scrambling to meet demand and as a result, the price of ethanol has shot up. It's now selling for more than $2.80 a gallon (around $118 a barrel). That's up from a low of $1.35 last summer and a four-year average price of around $1.70. The ethanol mandate has caused price spikes above $4 a gallon and spot shortages at places on the East Coast.
The prices would no doubt be much higher if the federal government didn't provide a whopping 51 cents per gallon tax credit for ethanol producers. Illinois also provides a state sales tax discount that amounts to three or four cents a gallon. And did we mention the high tariffs on ethanol imports that protect the domestic industry from competition?
Gasohol, which includes 10 percent ethanol, is common in the Midwest. The cornfields it comes from are close by and, over the years, an extensive infrastructure to blend it into gasoline has been developed. But there's no comparable infrastructure in other parts of the country; one must be developed. That also adds to the expense -- and the price of gas.
Of course, the American Coalition for Ethanol points you toward a study [PDF] that says ethanol is not a significant part of the price increase this spring.
The National Corn Growers Association also has a big ethanol page.
World sugar prices are expected to rise over the next year. Some ethanol projects use sugar rather than corn to produce the alcohol needed. Brazil learned painful lessons in 2000 about dependence on sugar prices. That country moved toward ethanol fuel years ago, but when the nation's sugar crop suffered one year, Brazil found itself as dependant on sugar imports as we find ourselves dependant on imported oil.
Ethanol Terms Explained
The American Coalition for Ethanol explains what each of these terms means:
- "Ethanol" is the 100 percent strength, fuel-grade ethanol produced at one of 90-plus ethanol production facilities across the United States. This pure ethanol is blended in various percentages with unleaded gasoline to make a finished motor fuel, the most common blends being 10 percent and 85 percent.
- "E10" (10 percent ethanol, 90 percent gasoline) is a fuel for use in all vehicles, no matter the make or model. All auto makers approve up to a 10 percent blend of ethanol by warranty, and many recommend it because of its cleaner burning, high octane characteristics. According to 2004 fuel consumption statistics, ethanol was blended into approximately one-third of America's gasoline. The majority of that ethanol was consumed as E10, the 10 percent ethanol blend that can be used in all automobiles. Some motorists are already filling up with ethanol-blended fuel, but just aren't aware of it. Each state controls its own pump-labeling requirements, so in some states this type of ethanol-blended fuel is labeled at the gas pump and in some it is not.
- "E85" (85 percent ethanol, 15 percent gasoline) is an alternative fuel for use in Flexible Fuel Vehicles (FFVs). These vehicles are truly flexible because they can be fueled by E85, any blend of ethanol up to that 85 percent level, or straight unleaded gasoline. [...] A link to a map of stations offering E85 and a list of FFVs is available at www.ethanol.org/e85.html.
Ethanol Stills
Like everything else, you can find "build your own ethanol still" on the Internet. The sites claim there are lots of people doing this now.
You will need an ATF Fuel Distiller's Permit so the feds don't think you are making White Lightning to drink. Web sites that know about such things warn you to check the box on the ATF application form showing that you will produce less than 10,000 gallons per year, or you will have to post a bond. Click here to see the permit application form. [PDF] I suppose you could FOIA to find out who in your area has a permit.
Ethanol Stocks Soar
A Wired.com column reported:
Much of the investment in ethanol plants is done by farmer cooperatives, but a few publicly traded companies are also involved. They've been richly rewarded by investors for their efforts.
Shares of Pacific Ethanol [Inc.], based in Fresno, Calif., have more than tripled since last summer. On Monday, the stock jumped 14 percent after the company announced it had completed some previously announced transactions. The company sells ethanol primarily in four Western states and is building a production plant in California. In the first half of last year, it posted a loss of $4 million.
Archer Daniels Midland, the agricultural processing technology giant, is also getting a stock boost from ethanol-hungry investors. The price of ADM stock has nearly doubled in the past year as the firm expands its ethanol output. [See chart]
Meanwhile, shares of The Andersons [Inc.], an Ohio company involved in agriculture and transport, have also been on a tear following announcements of the firm's investments in ethanol production facilities. [See chart]
Across the Atlantic, Novozymes, a Danish firm that develops enzymes used in ethanol production, has also seen its shares rise sharply. [Performance background]
Two more companies, VeraSun Energy of South Dakota and Aventine Renewable Energy of Illinois, have announced plans to "go public," but no date has been set.
Here is a directory of other renewable-energy stocks. Some of these companies may be near you.
Subdivisions Without Hydrants
Al's Morning Meeting Laura K. Negri sent me a link to this story from KHOU-TV in Houston about whole subdivisions being built without fire hydrants, and with bridges that are too small for fire trucks to cross. It is worth asking firefighters near you if this is a local issue worth mining.
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