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142 comments on DrumBeat: June 20, 2006

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Robert Rapier on June 20, 2006 - 5:26pm Permalink | Subthread | Parent | Comments top
Here is a bit from today's OPIS report:

While ethanol continues to grab the public interest as it is seen in national headlines and mainstream media spot values continue to rise for the blending component. And while West Coast ethanol values are strong they pale in comparison to prices being seen on the East Coast.

Spot ethanol on the East Coast today was seen trading from $5.50-5.75/gal and based on current RBOB values in the New York Harbor the huge price of ethanol is adding some 29cts to the price of finished gasoline, based on a 10% blend.

I guess ethanol does have a useful purpose after all. It is going to force us to conserve even faster due to it being mandated. Of course I don't think this is what the administration had in mind when they mandated it. The good news is that the amount we require in our gasoline will increase over the next few years, which will drive prices ever higher and force us into conservation mode.

RR

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AlanfromBigEasy on June 20, 2006 - 5:37pm Permalink | Subthread | Parent | Comments top
Per my understanding, only pollution non-attainment areas (polluted cities) have to add ethanol.  So Baton Rouge & Houston see a price hike due to ethanol, New Orleans and rural areas do not.  California got at exemption from the ethanol requirement.

Correct ?

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Robert Rapier on June 20, 2006 - 7:21pm Permalink | Subthread | Parent | Comments top
This is true, but there are a lot of non-attainment areas, especially in the northeast. California did get an exemption, but I read that a lot of producers already had contracts in place to supply or purchase ethanol. Give it some time, and ethanol will probably start to disappear from California markets.

RR

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Robert Rapier on June 20, 2006 - 7:24pm Permalink | Subthread | Parent | Comments top
Well, I should add that this WAS the case. Per the new energy bill, a certain percentage of ethanol is mandated into the gasoline pool period. I don't know how this breaks down though (i.e., if it will mostly be in the non-attainment areas).

RR

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AlanfromBigEasy on June 20, 2006 - 7:40pm Permalink | Subthread | Parent | Comments top
And Iowa.
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Robert Rapier on June 20, 2006 - 7:46pm Permalink | Subthread | Parent | Comments top
And Minnesota. I think they are trying to go to 20%. Perhaps the Minnesotans will meet the mandate for the rest of the country, and we won't be forced to buy the stuff. :) They will be paying $5/gal for ethanol and getting worse gas mileage, while I continue to avoid the stuff like the plague.

RR

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