Oh groan, gee whiz, changes ahead

Ethanol attracts water and other chemicals,
so it can’t be sent through the long-established pipelines.

It must be shipped in tanks. Truck or rail. Ethanol is straining railroads already taxed by shipments of coal, containers and grain. [subscriber story at the Wall Street Journal]

Ethanol demand brings big profit but,

  • all freight costs will increase
  • railroads are spending billions
  • 425000 rail carloads of ethanol per year
  • add over 100 million tons of rail capacity
  • double the railhead capacity that exists today
  • cost to move by rail averages 4 to 5 cents per gallon
  • may outstrip capacity to build rail cars, barges and storage
  • costs twice as much per gallon of ethanol to ship corn by rail
  • Horrendously congested, one-third of the country’s rail cargo passes through Chicago, the hub for the corn states. Freight may be delayed two days or more.

Who’s singing the “intermodal multinodal yodel” !?!

More capacity struggles to come:

water for corn, 1,200,000 gpd,
water capacity, 300,000 gpd,
water peak demand, unknown

My thought:

We will not convert our nation to ethanol. The task is too great. But blending ethanol reduces the demand for crude oil and increases gasoline supply for a given refining capacity. We will likely divert crude oil demand, and do the best we can.