The ethanol mandate requires gasoline companies to do something that, at the moment, they'd do anyway.
The reason, in a word, is octane.
Octane is a measure of gasoline's tendency to ignite under pressure. If it's too low, the gasoline/air mixture in an engine's cylinders will burn too soon, creating damaging "knocking." Rhe industry standard for gasoline is 87. But getting gasoline's octane rating up to that standard costs money. It means more refining of the petroleum, or using high-octane compounds in your gasoline formula, such as — you guessed it — ethanol. So gasoline companies aren't using ethanol for its energy — they're buying it for its high octane rating.
There are other compounds that you can add to boost octane levels, but many, like alkylate or iso-octane, are generally more expensive than ethanol. Another additive that is widely used globally, called MTBE, has such a bad reputation for polluting the environment that many states have passed regulations that make it difficult to use.
"As of today, the alternative sources of octane are more expensive," says Irwin, who just updated his calculations on demand for ethanol last week.
Niznik, from Stratas Advisors, says that when corn prices hit a peak in 2012, because of a drought in the Midwest, there were bitter complaints about the ethanol mandate among farmers and people in the food industry who wanted that corn to be used for animal feed. "They were assuming that if we used less ethanol, the price of corn would go down," he says. "The truth is," Niznik continues, "the [petroleum] refining folks knew in their hearts that if the [ethanol mandate] went away for a while, ethanol use wouldn't drop much. They were looking around at the octane replacements, and knew that those things were really expensive." Niznik says removing ethanol also would have forced gasoline companies to disrupt their refinery operations.
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Today's Featured Article - Listening to Your Tractor - by Curtis Von Fange. Years ago there was a TV show about a talking car. Unless you are from another planet, physically or otherwise, I don’t think our internal combustion buddies will talk and tell us their problems. But, on the other hand, there is a secret language that our mechanical companions readily do speak. It is an interesting form of communication that involves all the senses of the listener. In this series we are going to investigate and learn the basic rudimentary skills of understanding this lingo.
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