ETHANOL

ETHANOL

Well, the country is going crazy building ethanol plants. The high price of gasoline has investors throwing money at anything that seems like it will take advantage. All over the country these plants are being built. Some will soon be coming on line and others will take a couple of years to finish.

Ethanol is made from corn, usually. We have a lot of corn. You cook this corn and you can decant this liquid that can be added to gasoline to power internal combustion engines like those in cars. Sounds like a good deal. The ethanol is cheaper than gasoline so the resultant mixture, in effect, lowers the price of fuel.

Lets think about this. The country is going to save a lot of money by spending less on gasoline. Good deal. Engineers, contractors and material suppliers are all being kept busy, for a while, building the plants. Good deal. We can thumb our noses at the oil cartel. Good deal. So many boilers are used in building these plants that the price of boilers is skyrocketing in the country. Bad deal. A huge amount of power (coal) is necessary to fuel the boilers that cook the corn causing the price of this fuel to rise. Bad deal. New equipment will be necessary to mix and deliver the fuels. Bad deal. You can go on and on like this. What you hope for in the final accounting is that you are paying your money to American farmers rather that Arab oil sheiks. I hope that's the way it works out. If the price of oil goes back down or we have a large dip in the corn harvest, it all could be a big bust.