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Thursday, April 03, 2014

Energy News: Why you will pay more the gas pump soon

The U.S. Energy Information Administration report on causes at Rail congestion, cold weather raise ethanol spot prices:
Extremely cold temperatures this winter led to rail congestion in and out of midwestern terminals that delayed shipments to other regions and resulted in significant ethanol stock draws. Railcar dwell time, the time that loaded railcars spend in a terminal awaiting movement, at Burlington Northern Santa Fe Corporation’s Galesburg, Illinois terminal, which handles many ethanol cars from Iowa, nearly doubled in early 2014 to reach a peak of 60 hours in February and remain above year-ago levels.

While more than 70% of ethanol producers are equipped to load unit trains (trains running a single product), only about 35% of gasoline blending terminals are equipped to receive them. The average speed of manifest trains (trains running multiple products), which are often used to deliver ethanol to gasoline blending terminals that are not equipped to handle unit trains, decreased by 23%, from 22 miles per hour (mph) to 17 mph over the past 12 months.

Ethanol stocks were drawn down nationwide by nearly 2 million barrels (bbl) from mid-February to mid-March, partially recovering to 15.9 million bbl on March 28. This is more than 4 million bbl below typical March levels, which averaged more than 20 million bbl from 2011 through 2013. East Coast inventories were especially hard hit and on March 14 reached their lowest level (4.5 million bbl) since EIA began recording data in June 2010.
Ethanol, the gift that keeps on giving.

The EIA has a nice graph, though: 

Source: U.S. Energy Information Administration based on Oil Price Information Service (ethanol prices) and Thomson Reuters (RBOB prices).
Note: RBOB is reformulated blendstock for oxygenate blending gasoline, a motor gasoline blending component intended for blending oxygenates to produce finished reformulated gasoline.

UPDATE: Oh, "Illusion of Climate Fixing?" (that a label below) see "Downsides of ethanol spur Obama to urge reduced usage" from 2013:
The Obama administration on Friday proposed to reduce the amount of ethanol in the nation’s fuel supply for the first time, acknowledging that the biofuel law championed by both parties in 2007 is not working as well as expected.
I hope to shout. Pay more, get less. What a country.

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