Tuesday, January 8, 2008

Ethanol Infrastructure

The ethanol industry got a large boost today as Magellan Blending announced plans to build blending terminals in its home state of Oklahoma, as well as Georgia and Delaware. This is important to the ethanol industry because of the relatively few terminals capable of blending ethanol due to the high upfront investment needed to build the blending station so that the exact blend (either E10 or E85) can be made. Not only is this important for simply the logistical nature of storing and blending ethanol into gasoline, but it also allows for cheaper prices in ethanol to occur. This is because ethanol lacks a nationwide pipeline like the one gasoline has, which necessitates the use of trains to hail the ethanol to its destination. The problem isn't the train, which can be very efficient and relatively cheap when hauling 100 cars of ethanol, but most blending stations that exist now don't have the capability to accept the train because they don't have any tracks. This creates the need to haul the ethanol by truck, making the process more inefficient and more costly to the consumer. The Magellan station will be able to accept rail ethanol and so should be able to streamline the process of getting ethanol ready to run in your car.

Just for fun I've included a couple of pictures showing ethanol blending stations and equipment below.



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