Why is Ethanol almost as expensive as gasoline?

Question

Why is Ethanol almost as expensive as gasoline?

Answer 1

It's not mass market yet.

Answer 2

It's in the early stages so it costs more to produce. Once they figure out a more efficient way the price will go down because there are less taxes on Ethanol.

Answer 3

Because it takes massive amounts of water, electricity and oil to produce.  Farmer's use alot of nitrogen-based fertilizer, heavy machinery and irrigation water to grow corn, which then has to be taken to the distillery.  Distilleries use alot of power, and many rural electric companies are now trying to build more coal plants to power ethanol distilleries.  Finally, ethanol is corrosive, so it can't be shipped in a pipeline.  You have to use rail and trucks to move it around.  If you think it's expensive now, try actually using it.  A vehicle running on E-85 gets as much as 30% worse mileage.  Plus, you're getting a 50 cent per gallon break on the price thanks to the federal government and the corn lobby.

Answer 4

because it takes more energy to produce ethanol than gasoline.

More energy = higher price

The down side of this is, this "energy" is dirty energy, so ethanol is actually worse for the environment than gasoline.

Answer 5

Because we have not industrialized the production of Ethanol yet..  So it still costs a lot to make it...

Answer 6

I don't know but I think it's better to go electric.

Answer 7

Ethanol is much more expensive than you can even imagine

It is destroying animal habitats ,meaning forrest faster than anything else has ever before .

Being replaced with monoculture plantations

that have to be irrigated ,are only inhabited by plagues of insects which are controlled by pesticides ,and heavily fertilized ,because they destroy natural soil formation.

all expensive methods at the expense of bio diversity and all animal life that used to exist before as well as invaluable flora .



The irony here is that the growing eagerness to slow climate change by using biofuels and planting millions of trees for carbon credits has resulted in new major causes of deforestation, say activists. And that is making climate change worse because deforestation puts far more greenhouse gases into the atmosphere than the entire world's fleet of cars, trucks, planes, trains and ships combined.

"Biofuels are rapidly becoming the main cause of deforestation in countries like Indonesia, Malaysia and Brazil," said Simone Lovera, managing coordinator of the Global Forest Coalition, an environmental NGO based in Asunción, Paraguay. "We call it 'deforestation diesel'," Lovera told IPS.

Oil from African palm trees is considered to be one of the best and cheapest sources of biodiesel and energy companies are investing billions into acquiring or developing oil-palm plantations in developing countries. Vast tracts of forest in Indonesia, Malaysia, Thailand and many other countries have been cleared to grow oil palms. Oil palm has become the world's number one fruit crop, well ahead of bananas.

Biodiesel offers many environmental benefits over diesel from petroleum, including reductions in air pollutants, but the enormous global thirst means millions more hectares could be converted into monocultures of oil palm. Getting accurate numbers on how much forest is being lost is very difficult.

The FAO's State of the World's Forests 2007 released last week reports that globally, net forest loss is 20,000 hectares per day -- equivalent to an area twice the size of Paris. However, that number includes plantation forests, which masks the actual extent of tropical deforestation, about 40,000 hectares (ha) per day, says Matti Palo, a forest economics expert who is affiliated with the Tropical Agricultural Research and Higher Education Center (CATIE) in Costa Rica.

"The half a million ha per year deforestation of Mexico is covered by the increase of forests in the U.S., for example," Palo told IPS.

National governments provide all the statistics, and countries like Canada do not produce anything reliable, he said. Canada has claimed no net change in its forests for 15 years despite being the largest producer of pulp and paper. "Canada has a moral responsibility to tell the rest of the world what kind of changes have taken place there," he said.

Plantation forests are nothing like natural or native forests. More akin to a field of maize, plantation forests are hostile environments to nearly every animal, bird and even insects. Such forests have been shown to have a negative impact on the water cycle because non-native, fast-growing trees use high volumes of water. Pesticides are also commonly used to suppress competing growth from other plants and to prevent disease outbreaks, also impacting water quality.

Plantation forests also offer very few employment opportunities, resulting in a net loss of jobs. "Plantation forests are a tremendous disaster for biodiversity and local people," Lovera said. Even if farmland or savanna are only used for oil palm or other plantations, it often forces the local people off the land and into nearby forests, including national parks, which they clear to grow crops, pasture animals and collect firewood. That has been the pattern with pulp and timber plantation forests in much of the world, says Lovera.

Ethanol is other major biofuel, which is made from maize, sugar cane or other crops. As prices for biofuels climb, more land is cleared to grow the crops. U.S. farmers are switching from soy to maize to meet the ethanol demand. That is having a knock on effect of pushing up soy prices, which is driving the conversion of the Amazon rainforest into soy, she says. Meanwhile rich countries are starting to plant trees to offset their emissions of carbon dioxide, called carbon sequestration. Most of this planting is taking place in the South in the form of plantations, which are just the latest threat to existing forests. "Europe's carbon credit market could be disastrous," Lovera said.

The multi-billion-euro European carbon market does not permit the use of reforestation projects for carbon credits. But there has been a tremendous surge in private companies offering such credits for tree planting projects. Very little of this money goes to small land holders, she says. Plantation forests also contain much less carbon, notes Palo, citing a recent study that showed carbon content of plantation forests in some Asian tropical countries was only 45 percent of that in the respective natural forests. Nor has the world community been able to properly account for the value of the enormous volumes of carbon stored in existing forests.

One recent estimate found that the northern Boreal forest provided 250 billion dollars a year in ecosystem services such as absorbing carbon emissions from the atmosphere and cleaning water. The good news is that deforestation, even in remote areas, is easily stopped. All it takes is access to some low-cost satellite imagery and governments that actually want to slow or halt deforestation. Costa Rica has nearly eliminated deforestation by making it illegal to convert forest into farmland, says Lovera.

Paraguay enacted similar laws in 2004, and then regularly checked satellite images of its forests, sending forestry officials and police to enforce the law where it was being violated. "Deforestation has been reduced by 85 percent in less than two years in the eastern part of the country," Lovera noted. The other part of the solution is to give control over forests to the local people. This community or model forest concept has proved to be sustainable in many parts of the world. India recently passed a bill returning the bulk of its forests back to local communities for management, she said.

However, economic interests pushing deforestation in countries like Brazil and Indonesia are so powerful, there may eventually be little natural forest left. "Governments are beginning to realize that their natural forests have enormous value left standing," Lovera said. "A moratorium or ban on deforestation is the only way to stop this."

This story is part of a series of features on sustainable development by IPS and IFEJ - International Federation of Environmental Journalists.

© 2007 IPS - Inter Press Service



Source: http://www.commondreams.org/headlines07/...

Answer 8

byderule has a good answer

I would add the following:

Ethanol's price reflects the cost to make ethanol. The price of gasoline reflects the fact that other people are willing to pay that price -- the price reflects supply and demand -- even though the cost to make gasoline is far lower than the cost to make ethanol. This can be seen in the large profits, which are not bad. Would you rather the production of gasoline involve the use of more resources just to see a lower profit margin?

Gasoline is taxed, making it more expensive. Ethanol receives tax breaks and subsidies, artificially lowering its price relative to gasoline.

The push towards ethanol is partially motivated by pork-barrel politics, partially by political pandering. The public wants to see Congress do something, so Congress does something that benefits their constituents, and most of the public is left ignorant of the true environmental costs of ethanol.

Answer 9

Supply and demand.

Is basically very simple. It is really no different than asking why gold is more expensive that steel. It is not only supply and demand, it is also how hard to it to get the gold and steel. It simply is much harder to find the rare gold as compared to the plentiful iron. Oil is about as easy to find as ethanol is to make. For now. Some day, oil will run low, the price will go way up, like gold is now, and more people will start making ethanol because they will have a giant crowd of people willing to pay as much as the expensive oil just to get anything to run their car so that don't have to walk 8 hours each day to get to and from work. But there is a cost to that. Millions of acres of farm land to grow the crops to make the ethanol. In fact, I doubt there is enough farm land in the world to grow enough crops to make as much ethanol as the oil we use now.

Answer 10

It is actually more expensive at the wholesale level, but it gets a tax break at the retail level that makes it less costly than gasoline.

Answer 11

It depends on where you are. Here in the mid west of Us its actually less for E10 89 octane plus fuel then regular gasoline. As production increases it will even get cheeper. What needs to happen is the taxes on the pump need to come down on Ethanol. Currently it is taxed like gasoline.

Answer 12

Because it costs a ton to produce, especially since it's in the early stages.  Right now it's a fledgling industry, which means the industry has to convert land, buy farms, build plants, advertise and market, and distribute.  Over time, if it takes off the way it should, the cost may go down...

... or they could choose to artifically inflate prices and increase margins, like oil people have done for years.  Let's hope it doesn't go that way!

Answer 13

It is most pure, less additives