Fuel additives and octane

[nomad]

Well I realize ethanol blends have been turned into a political hot potato and I don't know why I keep getting into these discussions.
Westfield, I realize hygroscopic around water may not be a good thing! I have been running it in everything since the early 80's with no problem's other than I think it may have more of a tendency to vaporlock. We have plenty of humidity in the summer and water problems have never occured. We always had to run HEET (alcohol) thru our vehicles in the fall to get the water out of the system and no longer have to do that.(gas line freeze up!) I guess with enough water absorbtion it can turn into a mess. Regular gas just let the water go to the bottom of the tank.
Of course I am a little biased since I grow corn but info I have read says it has been responsible for keeping gas prices lower for a couple of decades. That would stand to reason to me. Also that it replaced MTBE a known carcinegen that was showing up in ground water nation wide.

Kurt.

 

[Westfield_XI]

Kurt, not wanting to get political, I do agree that MTBE was very bad stuff, probably as bad as tetra ethyl lead. I am still not convinced that converting food into fuel while using hundreds of gallons of water is a good idea. Regarding the party of the those promoting ethanol,I just assumed that there were no Democratic pols in the heartland anymore. My bad.....

 

[Guest]

Of course I am a little biased since I grow corn but info I have read says it has been responsible for keeping gas prices lower for a couple of decades.
Kurt.

That's got nothing to do w/ gas prices.

Last time gas got to $3.69 down here oil was $147 a barrel, This time @ $3.69 it was ~$107.

Do the math, we're getting hosed for no reason.

As I understand it green members from a party of a different color is/was pushing corn juice. I've yet to see E85 anywhere down here. Seems it's always the other guys fault. :laugh:

Kinda funny how everytime the econonmy starts improving gas prices soar for no reason. I know we have trouble in the middle east but the math just doesn't add up.

I don't mind the stuff anymore as my Javelin doesn't knock on 87 10%

 

[rkep01]

Of course I am a little biased since I grow corn but info I have read says it has been responsible for keeping gas prices lower for a couple of decades. That would stand to reason to me. Kurt.

What you may be saving in the price of gasoline(?) you're losing in the prices of any other products that use corn - meat and other food stuff come to mind. If you really want to save money, develop natural gas a widespread transportation fuel.

 

[Glen_B]

If you're looking for octane boost, check out toulene.
I poured a quart into a fresh tank at the base of the Rockies as I drove the turbo bugeye to Lotto.
You can get pretty much whatever octane suits you without burning food.
Check it put on the web. I don't use it often, but before a long climb it's nice. No knocking if I "accidentally" boost a bit on the way up.
The Morris Minors just get premium, but they live more sedate lives.

Glen Byrns

 

[The_architect]

Here are a number of unrelated ramblings on the ethanol topic.

Labeling laws vary by State. Some require that gas stations post whether there is ethanol content, some don't. You should investigate what your state's laws are. There is also a website out there where consumers pinpoint the stations were ethanol-free gas is sold in their area. These probably change all the time, and are probably not updated, but you could always check and see if there is anything in your area.

Follow the money. It used to be that the oil companies were responsible for 80% of the crude commodities trading. Now 80% of the trading is done by commodities traders and hedge funds. These trades are relatively unregulated and have nothing at all to do with anything other than driving up the profits for the traders. I am not in finance, but I don't think you have to be a genius to see that these markets are being manipulated.

I own stock in an oil exploration company and it is trading for about 1/3 of what it was in 2008. Even factoring in for the crash there does not seem to be much of a demand for its services.

I am not sure if it is still the case, but within the last few months US refiners were actually exporting gasoline to other countries, even as prices at our pumps were going up.

The bottom line is laws of supply and demand have been turned on their heads here.

Gas prices should not be a presidential campaign issue. The president has almost zero control over them.

The following information is about five years old--so take it with the usual disclaimers. The cost of the raw materials accounts for about 60% of the price of a gallon of gas. 26 percent goes to taxes--although that varies by state. About 5 percent goes to operating costs. The rest is profit.

At one point sustainability advocates were in favor of ethanol as a way of reducing carbon. Now that lifecycle costs to the environment have been assessed--net btus consumed to plant, harvest, transport, process, create fertilizer, herbicides, pesticides, etc. soil erosion, loss of wildlife habitat, runoff that sends chemicals into the waterways, and so forth, it is generally understood at this point that it is not the panacea it was thought to be originally.

The subsidies that used to be paid to ethanol refiners in the form of tax credits (it was never paid to directly to farmers) and tariffs are what kept demand for domestic ethanol high and increased crop prices. There has been precious little both parties could agree on in recent years, but they let these laws sunset in January without a fight.

However, you won't see anybody weeping. The Renewable Fuel Standard started under the Bush administration and renewed by the Obama administration requires that 37 percent of the 2011-2012 corn crop be used for renewable fuels.

All that ethanol's gotta go somewhere. And, undoubtedly over the years it HAS offset the amount of oil we import--it has to have. Does it make gas cheaper? That is very hard to assess, but it seems doubtful. The fact is, there are tradeoffs all over the place, environmental, social, and so on that make this a complex topic. There always are.

The guy who farms our place also plants corn some years. We don't know what happens to it after it goes to the elevator, but it is real nice to have a little money to pay the taxes on the land. That is about all it covers.

 

[Westfield_XI]

I am sorry Architect, but the laws of supply and demand still function. The oil and gasoline market is a global market, one in which US demand is just a small fraction of the total, perhaps 20%. Just because domestic supply is up, which it is and domestic demand is down due to the recession does not effect the global picture. China and the rest of the world have taken up the slack in demand and kept it up, the days when the US was able to drive world markets are long gone.

The oil companies are not American companies with an obligation to us and our needs, they are international, moving product to wherever they can get the most return on their investment. If that means shipping gasoline overseas while the domestic price rises than there is no hesitation to do so. To not pursue the greatest profit irregardless of national borders is a breach of trust with their shareholders.

 

[The_architect]

Westfield,
Good points, particularly that the law of supply and demand continues to function on the global market. Couldn't agree with you more.

I'm not an expert at this, by any means. But, if you would refer to the Energy Information Administration's chart called The Availability and Price of Petroleum Products in Countries Other Than Iran, Table 1, published February 29, 2012, you will see a line that says, Petroleum and Petroleum Products Produced and Consumed in Countries Other than Iran. It shows that the average consumption between 2009 and 2011 in bbl per day was 80.2 million bbl/d; In January 2012 it was 82.9 million bbl/d.

Production is actually level between 2009 and the beginning of 2012, at about 83.3 million bbl/d. give or take 100 thousand bbl/day.

The inflation adjusted price of a barrel of oil in 2009 was $56--I don't know if that is Brent ($123 today) or WTI ($103) or a composite. So, a doubling of the price of crude when the global demand is flat.

How do we explain this? On the face of it, the rise of price of crude--and remember this accounts for 60% of the price of gas at the pump in the US does not seem to be regulated by global supply and demand of petroleum products, which has been level for the last three years. The point is that the global supply and demand, like other things, is only one factor in the price of gas at the pump. Other factors, such as the instability of the Middle East affects crude oil prices, speculation and the cost of other feedstocks such as ethanol. The term I probably should have used to describe what I believe drives the market is unregulated <span style="font-style: italic">speculation</span>--not manipulation. That makes me sound a little less like a fringe lunatic.

As I said, most crude is not traded by oil companies. This is one reason why the windfall profits tax that was levied against the oil companies in 1980 would not be workable as a way of evening this score for consumers today.

So I don't think the oil companies are driving the price of crude higher on their own. Doesn't seem like it. Does it help them if speculators do it for them? Absolutely.

I also completely agree that the oil companies have no obligation to Americans but are absolutely obliged to their shareholders to take their product wherever they can get the most money for it. Regrettably, I own stock in several of them, and their stock price does not track with the price of crude--and they are not blowing me away with returns. it appears to me the commodities traders are having a <span style="font-style: italic">much better ROI</span> than the oil companies these days.

But, like I said, this is not my area of expertise--I'm looking at this very simplistically, so surely the truth lies between our points of view.


addendum:
Forgot to mention that the price of ethanol has dropped from about $3 in October 2011 to around $2.25 these days. Go figure.

 

[rkep01]

As I said, most crude is not traded by oil companies. This is one reason why the windfall profits tax that was levied against the oil companies in 1980 would not be workable as a way of evening this score for consumers today.

So I don't think the oil companies are driving the price of crude higher on their own. Doesn't seem like it. Does it help them if speculators do it for them? Absolutely.

Where do I start? The windfall profits tax did not work in favor of the consumer then, and it would not work now. The only thing it did then and would do now is to reduce the availability of petroleum products everywhere. There was no "evening of the score" for consumers, only long gas lines.

As far as speculators driving up the price of oil, how do the oil companies benefit from that when they have to pay the increase, too? The oil companies don't get their crude solely from their own wells. They also have to buy crude on the spot market. And now I think that this thread has gone so far from the original subject as to completely hijack the OP's topic.

 

[The_architect]

To all--
I apologize for my long winded essays on this topic. This is a poor place for a discussion about energy policy. I only hoped to help straighten out some misunderstandings about the subject.

RKEP--the windfall profits tax was enacted in 1980 because Congress felt, among other things, that the industry was not paying its fair share of federal taxes. "It wasn't really a tax on profits, but an excise imposed on the difference between the market price of oil, which was technically referred to as the removal price, and a statutory 1979 base price." I cribbed that from Wikipedia. It was supposed to help even the score for taxpayers--most of whom were consumers, of course--who were hurt by oil prices as opposed to oil companies who were doing very well. You are correct that refiners buy oil on the spot market now, and do not produce or trade so much of their own, which goes to my point.

The Windfall Profit tax did not cause any gas shortages--which were the causes of the lines--which were over by 1975.

Of course, when the price of oil goes up, the price of the finished gasoline goes up, the price at the pump goes up, and the profit margin goes up proportionally.

I will STFU now.

 

[Millrat]

And to think all I really wanted to know is what to run in my little ol' Sprite 948

. Great discussion and someday I hope to get something in the tank to burn. As for now, I may have to wait until the fervor dies down .

 

[Glen_B]

Toulene

 

[nomad]

Like I said---political hot potato!! Appreciate Architect input and agree with pretty much everything he covered. One also has to remember what has happened to the value of the dollar when one buys into this "food for fuel" c--p! In the mid 1980's the univerity of Iowa was burning corn in its heat and light plant. It was doing this not to help out farmers but because, on a heat basis, it was cheaper that coal and coal is mined in eastern Iowa. Back then oat milling plants were buying oats from the other side of the world for less money than we could grow them. Strong dollar made all that possible and now that we have a weak one we are exporting corn and those things raised on corn like crazy.

Agree that speculation by the "funds" has a lot to do with the crazy prices.
I believe that that probably is the big deregulated banks using YOUR and MY money to do so!! We know they arn't paying us anything for interest and they are very reluctant to loan it.

Personally I think there is way to much money in the hands of way to few people!

My rant is done and sorry for the off topic!

Kurt.