The fact that high gas prices are considered a problem sort of suggests people would prefer to pay less in total for fuel; not more. (Call me Captain Obvious).

But here's your arithmetic lesson for today kids. E85 gives you 29% less gas mileage; so for a switch to E85 to be financially neutral to the driver, it needs to be 29% cheaper. (Which is somehow bigger than it sounds. That means if gas is $2.60, E85 shouldn't be more than $1.88)

It's only about 12% cheaper where I live, but it's just rolled out.

Of course you might assign more value to E85 for other reasons and it could sell at a premium, but I tend to doubt the market of flex fuel vehicle drivers will ultimately accept that.

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I have come to the conclusion that ethanol supporters are profoundly innumerate. Last week, when I pointed out that 44 cents/gal difference was not quite enough to make up for the lost fuel mileage, another poster fussed at me for using "funny math".

Ethanol is a lousy fuel, and it isn't even 'green' in any meaningful sense. Because dinosaur juice is used in the production of ethanol, it doesn't even come close to getting rid of imported oil! The only thing it has going for it right now is that it's not as insanely stupid as hydrogen.

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The NYT did an ethanol story earlier this week and talked to a car salesman in Illinois or somewhere who noted "the word was out" on ethanol's lower mileage. I hope so; this stuff is indeed lousy. Unfortunately, ethanol has become mixed up in this nationalistic, energy-independence crap that politicians on both sides of the aisle have rushed to embrace.

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I've never understood ethanol since it's introduction. It just never seemed to make sense to me... you need to use fossil fuels to create it, so it's not good for the environment, added to the fact that the resulting mileage from actually using it is very poor. So you get to pollute equally, if not more, and get less fuel mileage. I've never quite been able to grasp the math.

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I admite it, Ethanol is not a the super fuel everyone is hoping for. But what it does do is going to have some amazing effect on our economy in the years to come.

Currently, Ethonals major inpact on gas prices is it's needed by gas to maintain a high enough octain content to keep cars running clean and smoothly. Its also better for the enviroment then the previous octain booster, MBML since it just alcohal, and not a harsh chemical that turns off your Y chromosones.

Almost all gas in the US now has atleast 10% ethonal per volume, to help clean the gas. All cars can take this since its not enough to mess with the fuel system diluted by so much gas.

Now, Ethanol is a harder fuel to run a car on, and it can cost as much as 150 dollars more in production to get a car that runs on E85, then just 15% ethanol. But there is going to be a major advantage to owners that can run on E85 that is not present to straight gas drivers. This advantage is that they won't have to depend only on there gasoline to fuel there cars. When they choose, they can choose what is better for them.

This ablity to choose gas over ethonal, and vice versa will give them buying power since if gasoline prices go up, Ethonal may become a bargan.

Now you say Ethonal is not a bargan. And I admite you right, (right now atleast.) But consider this. Ethonal does not have central distribution points, and it is not distributed on the world market like oil is. It can be grown, cut, and brewed localy, and it normaly is.

So if a hurrican was to hit the southeast coasts, and take down a oil refinery. That would have little effect on ethonal prices. But in the same respect since you could easly put 10 or 11 ethonal plants in a single state, if one of those plants where taken out by a tornado, the others could ramp up production to cover the loss of that single plant.

This stablity will also have great effect on gas prices. As more and more gas station can start to provide ethonal, its price will go down. And as soon as it 2/3s the price of regular gas, it reaches a fair market value to gas. And thats when gas will be forced to stay at the price of ethonal because if it become 1/3 more expensive then ethonal, it makes ethonal a better purchase for your dollar.

We are not as this point where localy produced ethanol is 2/3s the price of mined oil products, but we can reach it if we all tell our car providers to make all there gasoline cars E85 ready.

Now I don't want to drive a Ford truck or Chevy Impala to take advantage of Ethanol, and neather should you. So to take advantage of Ethonals price controls on gasoline, we need to write our favorete car company and tell them you want the benifite of being able to drive our cars on ethanol. If we can do that, we have a vary great chance at taking advantage of ethanol to degree I have just written about.

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Cheezedog, the website ethanolfacts.com says that about 30% of gasoline in the US has ethanol in it, not "almost all".

I, personally, will avoid E10 as much as possible. I filled up with some in Northern VA a while back and I swear that my Passat had less "ooomph" and lower mpg on that stuff. Maybe future engines will be better tuned to run on E10.

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*** And as soon as it 2/3s the price of regular gas, it reaches a fair market value to gas. And thats when gas will be forced to stay at the price of ethonal because if it become 1/3 more expensive then ethonal, it makes ethonal a better purchase for your dollar. ***

Cheezedog, I applaud your economic thinking, but you're making some mistakes. You're on the right track that, for FFV owners, E85 can substitute for gas and vice versa; and that affects pricing -- or will, when E85 is widely enough available, and people are enough accustomed to it and understand MPG issues, that E85 settles into a rational market price ... your two-thirds of gas.

But even after that gas will continue to be the dominant fuel for a very long time -- there are some 220 - 230 million cars in the US that cannot (well, should not) use E85, and even right now very few new cars are flex fuel. And it will take incredibly long to build out the E85 pumps -- that's serious work and it's a big country.

For many many years to come, pricing will strictly be such that ETHANOL will track the price of GAS -- NOT the other way around.

For your oil crisis scenario: producers and gas stations don't price Ethanol based on its cost -- they price it based on what the market will bear. There will likely never be a time that Ethanol is a better deal financially than gas. If some event causes gasoline to go up in price, Ethanol will certainly follow right along.

At best, far into the future, E85 would only dampen oil volatility somewhat. When there is enough availability and substitutability, then we could view the E85 and gasoline supply as a single total fuel supply market. Then you could analyze suppply and demand curves for that single market of non-diesel auto fuel.

That supply would definitely still be affected by oil supply disruptions; and yes price swings should be moderated -- but not eliminated. That does not mean that gas prices track Ethanol's prices; they won't.

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"Cheezedog, the website ethanolfacts.com says that about 30% of gasoline in the US has ethanol in it, not "almost all"."

http://www.ethanolfacts.com/

Thats could be correct, or might be outdated, (I was speaking of 2005, and not 2006 as quoted by Ethanolfacts.) In any case, it really does not matter....

"I, personally, will avoid E10 as much as possible. I filled up with some in Northern VA a while back and I swear that my Passat had less "ooomph" and lower mpg on that stuff. Maybe future engines will be better tuned to run on E10."

http://www.ethanol.org/mtbebans.html

First off the loose of Ooomph, and lowered MPG is a result of Ethanol. Ethanol is a oxygenate, that allows fuel to burn cleaner as it adds oxygen to the chemical reaction. Ethanol is replacing MTBE which also was a Oxygenate, But 25 States have already banned MTBE. Why is such a fuel efficant addivetive being replaced for ethanol? MTBE is known to contaminates water supply easily. Its presence is also blamed by some scienticts for fish's reproductive organs to become transgender. And since we can't afford to have any more transgender things on this earth then we already have, we addopted the Alcohal as our new fuel oxygenate additive of choose.

I would tell you to avoid the stuff in the future, but you might not have a choose in the comming future. In any case if you check the ban list, you will notice that your beloved state of North Virgina is not on the list. So why are you finding E10 in North Virgina? Every time a new Ethanol plant comes up, it make Ethanol a little cheaper, and MTBE a little more expensive, (even for the states that not banned it yet.) And price tends to be more a more effective social deternate then any state law in deciding what you use for fuel. With 25 states already banning MTBE, and a good many new Ethanol plants being built around the nation to cash in on the MTBE ban, your going to have a harder time finding MTBE laced products in the future.

Of course everyone else in your state will eventually be running E10, so you may not notice the loss of Ooopmph as easily soon... And who really want to eat transgender fish anyway?

"But even after that gas will continue to be the dominant fuel for a very long time -- there are some 220 - 230 million cars in the US that cannot (well, should not) use E85, and even right now very few new cars are flex fuel. And it will take incredibly long to build out the E85 pumps -- that's serious work and it's a big country."

Yes, but your forgetting that almost everything in this nation eventually gets thrown away. Look out on the road and you will notice most of those cars and trucks you see are 10 years old, or newer. Ocationaly you will see a few that are 10 to 20 years old. And if your really lucky, you will see a car thats 30 years old. But vary rairly you will see a car thats actually 40 years old. (you really have to go looking for it!) Now, If this was not true, we still be swiming in Bel air convertables, ford skylines, and Dodge Desolos!

Cars are like shoes, and shoes get thrown away because they get worn and torn down with time.

This goes for gas stations too. Gas stations may not move around as much as cars, but they too do take wear and tear. Eventually the fuel storage tanks and pumps need to be replaced. And when they do, it will be vary likely they will be converted to Ethanol ready pumps and fuel sepositorys.

"For your oil crisis scenario: producers and gas stations don't price Ethanol based on its cost -- they price it based on what the market will bear. There will likely never be a time that Ethanol is a better deal financially than gas. If some event causes gasoline to go up in price, Ethanol will certainly follow right along. "

Unless we start running out of oil, your right... But what do I know?

http://service.spiegel.de/cache/international/spiegel/0,1518,426728,00.html

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