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Friday, Apr. 29, 2016

The start of something big

Wednesday, September 14, 2005

The Farmer's Cooperative gas station in Hinton has been in the news lately. The station is among the 17 retailers in Iowa selling E85, a blend of 85 percent ethanol, 15 percent unleaded gasoline. In fact, since March of this year, the station is the state's largest retailer of E85.

Roger Price, manager of the co-op, reports that on any given day, they sell about 8,000 gallons of fuel -- diesel, gasoline and E85. Of that total, from 2,000 - 3,000 gallons are gasoline. Of that, about 300 gallons -- less than ten percent -- is E85.

Sounds pretty insignificant, right?

From a statistical or spreadsheet viewpoint, you'd be right. From an economic, environmental and political viewpoint, you couldn't be more wrong.

If we have learned nothing more from the recent spike in fuel prices (which haven't come back down to below pre-Katrina prices), it is that we need to have an energy program -- any energy program. This energy program should, we believe, rely as much as economically feasible on clean, renewable domestic sources of energy. Solar, wind, ethanol and biodiesel should all become mainstream sources of energy, in our opinion.

One of the few bright spots of recent record gasoline prices is a renewed interest in alternative, renewable fuels, like E85, E10 (ten percent ethanol, 90 percent unleaded) and biodiesel. The National Ethanol Vehicle Coalition (NEVC) reports that the number of stations offering ethanol blended fuels has doubled in the past year.

That's good news for corn producers and the local economy. Farmer's Cooperative manager Roger Price commented in a recent Sentinel news report that "Ethanol's impact for us is significant. About 95 percent of the gasoline we sell is the 10-percent blend. The demand is huge for farmers, too. I'd say it's caused at least a 15-cent rise in the basis levels for corn."

Currently, all major automobile manufacturers make vehicles that are certified by the Environmental Protection Agency (EPA) to burn E85. The flexible fuel vehicles (FFVs) are primarily sold to governmental and corporate fleets. It is estimated that it costs the manufacturer and additional $150 per vehicle to make a "normal" vehicle a FFV.

While no one likes the word "mandate," we feel it is time to mandate that all 2007 and later vehicles be FFVs. With standardization in the manufacturing process, the cost per vehicle should come down.

With all vehicles being able to run E85, regular unleaded or E10, the market will truly be able to decide what fuel will dominate. With E85 being cheaper, burning cleaner and helping the local economy, we're confident consumers will drive the market in the right direction.

We hope that in a few years we will be able to look back on daily sales of 300 gallons of E85 as the start of something big.



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