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Will ethanol E85 catch on in the US? Will we Live Green and Go Yellow? - READ ONLY

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#1136 of 2104
Smart move in Louisiana by gagrice
Jun 20, 2006 (6:44 pm)
BATON ROUGE, La. Legislation to tweak a new law requiring alternative fuels to be sold in Louisiana -- so that it can't take effect if it would increase gasoline prices -- was sent to Governor Kathleen Blanco's desk today with final passage from the House.
 
Blanco's spokesman says the governor would look closely at the bill to ensure it protects consumers -- but doesn't try to sidestep the plant-based fuel requirement entirely -- before determining whether she will sign it.
 
Lawmakers approved the price control provision after the Legislature received criticism that the alternative fuel law it passed a few weeks ago would significantly bump up gas prices.
 
The Senate yesterday approved the language to limit the mandate, and House members approved it today in a 97-1 vote, with hours to go in the legislative session. Only Representative Elcie Guillory, of Lake Charles, voted against the measure.
 
The price control law sets up a trigger where the alternative fuel requirement would kick in six months after Louisiana-manufactured ethanol for 60 days costs no more than the average wholesale price of regular gasoline in Louisiana. A federal subsidy to lower the price of ethanol would be included in the consideration of the ethanol price.
 
Under the alternative fuels law, two percent of the total gasoline sold in Louisiana will have to be agriculture-based when ethanol production in the state reaches 50 (m) million gallons annually, biodiesel production reaches ten (m) million gallons each year or production of another alternative fuel reaches 20 (m) million gallons a year.
 
Louisiana doesn't have an ethanol plant yet, but several plans to build a plant are on the table.
#1137 of 2104
Re: "Continued next" [socala4] by markcincinnati
Jun 20, 2006 (6:45 pm)

Replying to: socala4 (Jun 20, 2006 5:39 pm)

I have read Crossing the Chasm and Inside the Tornado and your explanation of the early adopters and so on is both succinct and accurate as I recall. Moore's book was required reading in my world (IT consulting and systems integration and implementation) and it stands still as one of the great "pop" business books in recent memory. It has, however, been called too long for a magazine article and too light to be a whole book. Despite my personal affection and admiration for the works, I essentially agree -- instead of a book, Chasm could have been well done had it been more the quantity evidenced by "Who Moved My Cheese" -- but that is another debate for another blog, I'd wager.
 
My thesis, although not without its pragmatic appeal (to someone, I assume) and bent, is not based on appealing first to the pragmatic buyer.
 
Here's why:
 
I assume that someone with the means to acquire an Audi A8L, BMW 7 or Mercedes S class vehicle will not be first and foremost interested in saving even a dozen, or multiple dozen, Euros per tankful.
 
The appeal of the diesel is becoming (in some respects has already become) performance and perhaps the perception of prudence. Although, I must admit, presenting your new A8L with a 4.2 TDI as a purchase of an economy car or even a geek car is somewhat of a contradiction, well, it certainly isn't beyond the pale that it does happen.
 
I recently attended an Audi soire (there is one for a four state region, annually, and Cincinnati was "blessed" to have the event this year.) A Sebring driver was in attendance as was a "TD Race car!" The buzz, too, was about the performance of the A8L 4.2 TDI -- 0 to 60 in 6 seconds in a car THIS BIG!
 
The RS4 (gasoline powered) was also on display. Nothing on the floor that night was under $55,000. The room was hardly full of pragmatists (perhaps well heeled car groupies would be apt, however.)
 
The folks I know (and this is, I admit, NOT a representative sample) are not a few die hard engineering types. They are lovers of LPS (emphasis on P) cars; they look at TDI's from the Germans (generally) as the "next" wave of performance luxury vehicles.
 
As a follower of Moore, we should agree, too, that for any technology to be successful (beyond the innovators and early adopters) it must be easy to adopt and/or fill a desperate need -- I would submit that E85 and diesel do seem to be able to satisfy the former and perhaps will be called upon to fill a need that some believe is growing more desperate with every uptick in the price of a bbl of oil.
#1138 of 2104
Re: "Continued next" [markcincinnati] by socala4
Jun 20, 2006 (6:56 pm)

Replying to: markcincinnati (Jun 20, 2006 6:45 pm)

I see this as the essential problem:
 
The appeal of the diesel is becoming (in some respects has already become) performance and perhaps the perception of prudence.
 
Whoever is in this (small) group is not an innovator, by that definition. This group doesn't serve as tastemakers for technology, which is what needed if you want to sell diesel as a tech story. The prudence message brings you back to the very same late majority who obviously aren't ready for it yet.
 
A diesel racing car isn't going to be enough, in my opinion. (Not that it hurts, but it mostly preaches to the converted.) One thing I will say, though -- if anybody in the US market is ready for diesel, it's going to be Audi owners.
#1139 of 2104
Re: "Continued next" [socala4] by markcincinnati
Jun 20, 2006 (7:23 pm)

Replying to: socala4 (Jun 20, 2006 6:56 pm)

I doubt that diesel will be sold as a tech story, and the performance story overshadows the perception of prudence -- which is a "nod and a wink" form of prudence in the Premium class which apparently seems to care little about "real" prudence (for it probably doesn't have to.)
 
You are possibly right that Audi buyers (US) are ready for diesel, but my observation would have first been to place Mercedes in front of Audi in that regard.
 
I cannot dispute the notion that a diesel racing car "isn't going to be enough." But I don't follow the notion of this preaching to the converted -- many folks, were certainly surprised at the diesel's dominance, almost the audacity that this win suggested.
 
Perhaps those who already were going down the path of believing in diesels as serious contenders rather than smelly "drug store truck drivin' men's" vehicles are converted. I contend the larger population (in the US at least) are not yet converted but were or could be impressed by discovering that diesels aren't weird or difficult or inconvenient or expensive or something else negative.
 
Me, I'm still doubtful that diesel will make a serious dent in reducing our importation of Middle eastern oil -- but there are those who think 30% penetration is possible even if 15 - 20% penetration is more likely.
 
I'm rooting (but will not buy) anything that costs more to acquire without some benefit even if it is "all in my head."
 
Yep, there are those who will buy at the bleeding edge -- I may be out of the US mainstream (since I buy Audis, after all) car buying market -- but I doubt, likewise, that I qualify as a fringe (attracted to the weird) buyer.
 
Audi, BMW, Cadillac and Infiniti continue to court my purchases as if I was a member of the mainstream (but of course telling me all the while that I am a customer of discriminating taste.)
 
"I can see you are a man of power and influence. . . not me you moron, HER!" [sic] Pretty Woman.
#1140 of 2104
Re: "Continued next" [markcincinnati] by socala4
Jun 20, 2006 (8:37 pm)

Replying to: markcincinnati (Jun 20, 2006 7:23 pm)

You are possibly right that Audi buyers (US) are ready for diesel, but my observation would have first been to place Mercedes in front of Audi in that regard.
 
Probably a bit of both, but I'm going to guess that these days, Audi has a larger base of quirky buyers than does MB in the US market. Part of the Audi fan base is lured in by technology (quattro, FSI, etc.), so they may be ready to hear the technology message behind diesel, if there was one.
 
I contend the larger population (in the US at least) are not yet converted but were or could be impressed by discovering that diesels aren't weird or difficult or inconvenient or expensive or something else negative.
 
But how are you going to get out the message, and what message will it be?
 
I agree, the tech message won't happen, and probably won't work because the car enthusiasts, as much as they may love cars, aren't tastemakers. (Notice that the Prius lovers aren't really "car guys", they love the technology and/or eco-friendly message.)
 
And except for a few, I restate my doubt that the pragmatists will find enough benefit to pursue it. A huge fuel price difference favoring diesel would impress this group, but given current pricing, better economy with cars and fuel that cost the same just isn't a dramatic enough improvement to win over many buyers.
 
Which leaves you with marketing it based upon style and hype, something that puts diesel on the vanguard of cool and innovative, and creates buzz. And I doubt that is going to happen, either. A specialty car (for example, an interesting crossover, sports car, etc.) that might serve as a halo car for more pragmatic offerings could possibly help, but what manufacturer is going to stick his neck out on that? I know that I wouldn't.
#1141 of 2104
Re: "Continued next" [markcincinnati] by gagrice
Jun 20, 2006 (9:12 pm)

Replying to: markcincinnati (Jun 20, 2006 7:23 pm)

my observation would have first been to place Mercedes in front of Audi in that regard.
 
I think MB is already in the lead. They sold about 50% more of the E320 CDI than they had anticipated. For myself I am looking for them to bring the BluTec diesel in one of their SUV models. They have announced the arrival of the ML320 CDI in October 2006. They already jumped one hurdle by beating the Lexus RX400h in a cross country mileage challenge. That in itself would sell a few units. It is a superior platform to the Lexus midsize SUV and with a 30+ MPG diesel it is a practical SUV. I would buy one just for weekend jaunts to the desert. I would not have to worry about finding fuel for the whole time out. I understand the skeptics. I am more skeptical of the hybrids than when they first came out. I am very skeptical of the whole ethanol situation.
#1142 of 2104
Alan Greenspan on cellulosic ethanol by gagrice
Jun 20, 2006 (9:19 pm)
But what he had to say should be on America's front burner because it has to do with energy or the lack thereof. The balance between oil supplies and demand has reached such a precarious point, he said, "that even small acts of sabotage or local insurrection have a significant impact on prices." Our economy is beginning to get hurt by "the huge implicit tax of rising oil prices."
 
So much for official Washington's assurances that oil supplies are more than adequate. In any case, Mr. Greenspan doesn't believe government intervention is the most sensible answer. "Rising prices are a very effective tool in compressing demand," he said. That is, Americans will wean themselves from heavy reliance on petroleum because at a certain price range, they can't afford to fill their gas tanks. But it will be slow weaning, he predicted, "like watching grass grow."
 
A prosperous and secure future requires more than conservation and ethanol, which he expects to play only a limited role so long as ethanol is corn-based. The Greenspan prescription includes increased imports of liquefied natural gas, production of clean coal and nuclear power, and ... and cellulosic ethanol.
 
Cellulosic? That's ethanol made up of agricultural refuse, grass, wood, municipal waste and a variety of feedstock, which is less expensive and more available than just corn. The technology to develop this energy source has yet to be developed, but in the world according to Greenspan, market forces will make it happen.
 
The former Fed chairman is not so enamored of the elixir of markets that he has lost touch with reality. He believes that "oil will remain an important element of our energy future." But he also believes that markets will reward those who get busy with conservation and alternative fuels.
#1143 of 2104
Re: Or let me put it another way... [socala4] by tpe
Jun 21, 2006 (4:22 am)

Replying to: socala4 (Jun 20, 2006 6:00 pm)

If diesel had been invented yesterday, you'd stand a better chance of generating buzz than you could now.
 
What's new about ethanol?
 
You seem to take the devil's advocate position to any suggestion. Do you have any suggestions of your own that can't be immediately refuted by rational that you've already used against other ideas? I don't think so. So there are two possibilities. Either you don't believe there is a solution or you are just enamored by your own posts.
#1144 of 2104
No matter what. . . by markcincinnati
Jun 21, 2006 (4:32 am)
. . . actually happens, the dialog (here and elsewhere) is healthy.
 
If what we know (about reserves) is true and what we think is 1/2 true and what we speculate is even single digit true, none of us participating here will drive anything other than "mostly" conventional vehicles.
 
I read one of those "high buzz" articles in the New York Times or the Cincinnati Enquirer or Car & Driver or Better Homes and Garages, etc, that made the claim something like "for at least the next generation, and possibly two generations, we will be getting a minimum of 70% of our energy from oil."
 
Now, I guess that is possibly an understatement if you buy the Rand study that claims we have enough known oil in the US to "fuel" 100% of our current usage for 100+ years or 25% of our current usage for 400 years. Of course this is the study that says it will take 20-30 years for this oil to come on line, so who knows what "current usage" translates to decades from now. If indeed we have 800 trillion bbls of known reserves in the US, perhaps 30 years from now that will only last 10 years, not 100.
 
On the other hand, one has to have some cautious optimism that there will be some alternatives developed, discovered or adopted that may offer some relief.
 
My own speculation however is what happens when the global demand for energy per person catches up with ours here in the US. Aren't we about 5% of the population yet use 25% of the energy?
 
Perhaps E85 (if manufactured from secondary sources rather than food) is a bridge to somewhere -- or not. Making E85 from what is essentially food seems to track with the old joke, "we loose money on every transaction -- but we make it up in volume!" Rim shot.
 
 
#1145 of 2104
Re: Or let me put it another way... [tpe] by markcincinnati
Jun 21, 2006 (4:49 am)

Replying to: tpe (Jun 21, 2006 4:22 am)

Although our discussions here sometimes remind me of the Monty Python skit, "The Argument" (where the hapless customer who wants an argument finds, instead, that the proprietor of the Argument store seems only capable of contradiction rather than genuine argument), there is merit -- I think -- in some contradiction. For this reason, I do encourage it, somewhat.
 
Now, with just about every point made here being contradicted though, I would hope that we can solicit some thoughts that would respond not only by dismantling the pro-ethanol, pro-diesel, pro-hybrid, pro-whatever du jour alternative but by suggesting a course that would either make the offending alternative more likely to succeed, or proffers an alternative that is worth examining on its own merits.
 
Clearly there are folks who are for E and against E (at least as it is currently being undertaken as an energy solution), ditto diesel and hybrid and so on.
 
Yet, I wonder what some folks who are clearly gifted at articulating their point of view would do instead.
 
I personally do not have much confidence in E85 as a solution, but I do support some (at least) investment into vetting this solution as fully as the market (and our willingness to spend our taxes) will allow. In part, my "advocacy" or at the very least exploration of the topic of diesel as perhaps a more rational bridge to somewhere is based on my belief in an approach that does not merely contradict. "E85 will! E85 will not!" And so on.
 
I am of the mind, today, that E85 MAY not, but that diesel "might." Hence my willingness to enter into these discussions. Hopefully, those who can argue strongly will grace us with a strong argument for something even if it is the status quo.
 
Sure not to convince anyone, but sure to spark at least contradiction I submit for your dining and dancing pleasure an article pertaining to at least one alternative to gasoline:
 
Klicky Klicky

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