Rising prices prompting rise of alternative fuels

New renewable fuels may mean added cash in the pockets of farmers as sentiment and necessity are combining to replace foreign oil with American products.

As price of gasoline rises, it comes as no surprise that most consumers are interested in alternative ways to supply energy for automobiles, trucks and other motorized machinery.

Kansas experts agree that increasing demand for one of these fuels, ethanol, or grain alcohol, already may be keeping local milo prices a nickel a bushel higher than they would be otherwise.

Multiple alternative car fuel systems are developing-hydrogen fuel cells, the gasoline-electric hybrid vehicles now entering the market, vegetable-oil diesel and others.

The most commonly available alternative fuel over the past decade has been E-10, which is 90 percent gasoline and 10 percent ethanol, commonly called gasohol.

It may be familiar to Marion County residents as a product sold at local Ampride and Caseys stores.

Now, for the first time in Kansas, a new ethanol fuel is being sold in two locations-Garnett and Maize. Expectations are that sales will spread as more and more vehicles that can use it are sold, and more stores commit to it.

The new ethanol is called E-85, or a blend that nearly reverses the proportions of the familiar gasohol at 85 percent ethanol and 15 percent gasoline.

More E-85 already is sold in states north and west of Kansas, although the total percentage of the fuel market is small.

For instance, the Colorado Corn Growers Association just commemorated the opening of the 10th station selling E-85 in that state.

Marion County farmers may immediately receive a tiny milo price support from E-85 because some of the grain they produce is processed into ethanol at the Abengoa Bio-Energy plant at Colwich.

Ethanol from there already is processed as E-10 through the National Cooperative Refinery Association plant at McPherson.

Delbert Peters, who is in charge of fuel purchases for Cooperative Grain & Supply and Ampride in Hillsboro and Marion, confirmed that ethanol from Colwich comes here as E-10 from NCRA, but he said there are no immediate plans to sell E-85.

Peters said the problem in adding a new fuel is that a location only has so many underground storage tanks-for instance four at Ampride in Hillsboro.

For a new fuel to be added, he said, most likely one of the gasoline or diesel products now being sold would have to be discontinued, and its tank cleaned out for the new product.

Peters said the next new fuel being looked at for sales here is a diesel blend with 2 percent of its mix being soybean diesel, or soy-diesel.

He sees the turn to any new fuel as demand-driven, with a high dependency on what the auto makers recommend in terms of a vehicle’s fuel octane requirements.

Ted Schultz is manager of TEAM Marketing headquartered at Moundridge, which sells local grain for cooperatives in Marion, McPherson, Harvey, Reno, Saline, Rice, Butler, Sedgwick and Chase counties.

Schultz said, “We’re the biggest supplier” for Abengoa now, although the alcohol plant only has storage for seven days of operation, and at times needs to go to terminal elevators or other sources.

The grain supplied usually is milo, also known as grain sorghum, although corn is predominant in other areas. The U.S. Energy Administration says ethanol can be made from many organic things, including crop residues and paper.

Schultz said TEAM also has sold grain to the new ethanol plant at Russell, which is unique in providing such things as city power and carbon dioxide for oil exploration.

He added that “on a weird year anything is possible,” explaining that the normal national flow of grain is to the south and west from here. The system is set up so that normally Nebraska grain coming from north of Russell would be cheaper for the plant.

Abengoa, which is a corporation with headquarters both in Spain and the United States, reports that additions to its Colwich plant, originally built in 1982, have more than doubled production to 25 million gallons of fuel alcohol annually.

The grain for that also produces two other products that are marketable-193,000 tons of wet distillers grain and 43,750 tons of food grade carbon dioxide.

Total Kansas production is rated at 122.5 million gallons a year with six plants. The four others are at Campus, Garden City, Atchison and Leoti.

USEA reports that the United States hit a record daily production of ethanol in February of 212,000 barrels a day.

That compares to the previous record of 211,000 barrels recorded one month earlier, and also compared to production of 169,000 barrels a day a year ago February.

The agency says this production and the turn to E-10 and E-85 is small compared to what Brazil has done. There, 40 percent of that nation’s automobiles burn 100 percent alcohol with the remaining 60 percent burning a blend of 22 percent alcohol and 78 percent gasoline.

Nevertheless, Robert White, who represents the Kansas Corn Growers and Kansas Grain Sorghum Producers Associations in ethanol promotion, points out that the U.S. ethanol industry is the fastest-growing energy industry in the world.

Facts compiled by his groups show that American ethanol production hit a record 2.81 billion gallons from 1.077 billion bushels of grain in 2003-more than doubling from 1.3 billion gallons and 500 million bushels in 1997.

They expect a new ethanol plant to open every six weeks for the next 18 months, according to recent announcements.

Ethanol is blended into 30 percent of the nation’s gasoline. The ethanol in 2003 accounted for 10 percent of the U.S. corn crop and 12 percent of the U.S. grain sorghum crop.

White said there is steadily growing interest in producing ethanol from grain using other renewable energy sources such as wind and solar power. The Abengoa plant already uses methane gas from Brooks Landfill at Wichita for its energy source.

The production techniques continue to improve on the original formula where a BTU of energy was required to produce a BTU of fuel ethanol with the profit in the distillers grain byproduct used to feed cattle and other livestock, White said.

White said E-10 has helped bring down, and stabilize, prices for mid-grade fuels. He pointed out that before gasohol, the price on a medium octane fuel typically was 5 to 9 cents a gallon higher than the lower grade.

With E-10, the price difference has dropped to 1 or 2 cents, he said.

Unleaded gasoline in Kansas is set at 87 octane, White said, with the E-10 at 88.5 to 89 octane. E-85 is rated at 105 octane, he said.

White predicted ethanol will continue to displace more and more of the nation’s gasoline needs with refineries “demand driven” to supply it as clean air standards continue, and more vehicles are produced to handle E-85. There even is a push to add ethanol to diesel to help burn particulate matter before it’s exhausted.

Right now, 62 percent of the nation’s crude oil and 30 percent of its gasoline are imported, he said.

Ethanol promoters say burning more ethanol is in the interest of saving consumers’ money, promoting American self-sufficiency, cleaning the environment, and contributing to world peace by easing worldwide oil competition.

White said tougher clean-air standards in California and the Northeast have been a driving force in higher ethanol use, and in coming out with so-called flexible fuel vehicles, known as FFVs, that can use any blend of gasoline and alcohol up to E-85. Ethanol, with federal excise tax credit to help, has exerted a downward pressure on fuel prices in those areas to lower them compared to what they would have been using other products, he said.

White said all vehicles can use E-10, but only FFVs should use E-85 for best efficiency. Older vehicles may not have fuel lines of correct materials to handle E-85, he said.

While newer vehicles that aren’t FFVs may not be hurt by using E-85, they may not use it to full efficiency. He confirmed reports that because ethanol contains more oxygen than gasoline, on non-FFVs, the oxygen sensor may direct the vehicle to adjust fuel flow because it senses there is too much oxygen resulting in inefficient use. The engine trouble light on the dash may come on.

White said his group is available to help gasoline retailers convert tanks to E-85, and he believes they will see the need as evident in this growing list of vehicles that can use the fuel.

It is important, he said, for retailers to get existing sludge and water out of tanks because ethanol will separate, and cut it out for possible contamination anyway, just as it did in first use in older vehicles where grime suddenly cut loose clogged fuel filters.

It is worth the price, he said, to use the ethanol fuel itself to help clean a tank, and then pump it out for recycling.

If all this isn’t enough to make you want to use ethanol, he said, consider that you won’t have to buy any other product to prevent wintertime gas-line freeze. Ethanol will draw the moisture out without freezing itself to prevent the problem.

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