Gas price increase due to reduced corn crops?

[PiratePast40]

Wondering what we're going to see with increased price of ethanol because of the midwest drought. I've heard that ADM is allready shutting down ethanol plants. Anyone hearing any projections?

 

[Tail_Gunner]

Re: Gas price increase due to reduced corn crops?

Not going to happen..Us gas comsumption down by 20% from 2008....World wide glut of oil... europe on its lips.... 3 rd largest oil producer in the world coming back on line (Iraq) Saudi's blown up oil restriction's..Canada now selling it oil to China unleashing perhaps the largest oil reserve in the world. North Dakota bakken formation is doubleing its output every 2 yrs..We are a wash in oil and natural gas one of the world's biggest sham's has been portrayed on the american public.....Hmm no more earthquakes can you imagine that..Fracking hysteria fact or fiction

1. http://en.wikipedia.org/wiki/Green_River_Formation
Oil shale

The Green River Formation contains the largest oil shale deposits in the world. The 213 billion tons of oil shale contain an estimated 3 trillion US barrels of shale oil, up to half of which is estimated as recoverable or about equal to all the entire world's proven reserves.[11] [12]

2. http://en.wikipedia.org/wiki/Bakken_formation
In 2011, a senior manager at Continental Resources Inc. (CRI) declared that the "Bakken play in the Williston basin could become the world’s largest discovery in the last 30-40 years", as ultimate recovery from the overall play is now estimated at 24 billion bbls.[17] (Note : the recent discoveries off the coast of Brazil should be greater, with proven reserves of 30 billion,[18] and a potential for 50 to 80.[19]) This considerable increase has been made possible by the combined use of horizontal drilling, fracking, and a large number of wells drilled. While these technologies have been consistently in use since the 1980s, Bakken is the place where they are being most heavily used : 150 active rigs in the play and a rate of 1,800 added wells per year. CRI developed a technology allowing its rigs to move a few hundred yards on hydraulic "feet", increasing the rate of well drilling.[20]

Notice Brazil.....

http://money.cnn.com/2011/12/05/news/economy/gasoline_export/index.htm
But demand for gas has dropped nearly 10% in recent years. It went from a peak of 9.6 million barrels a day in 2007 to 8.8 million barrels today, according to the EIA.

http://www.huffingtonpost.com/2012/02/23/us-motorists-gasoline-mexico-outbid-refinery_n_1297527.html

Im done the list is endless....Now lets keep poloticing out of this

 

[PiratePast40]

Re: Gas price increase due to reduced corn crops?

Well maybe I don't understand the mandates for ethanol. I was under the impression that we had to have ethanol in the gasoline and it doesn't have anything to do with the gasoline or oil supply itself. I was wondering if the shortage of corn would affect the price of ethanol.

 

[Brewman61]

Re: Gas price increase due to reduced corn crops?

Since corn is what ethanol is made from, higher corn prices (for whatever reason) increase the cost of producing ethanol. But ethanol is only 10% of the volume of a gallon of gasoline. Depending on what state you live in and what their laws are, the "mandates" may vary.
Minnesota is where I'm from. MN requires oxygenated gas for pollution control reasons. The stuff that used to used to oxygenate gasoline has been banned here so they use 10% ethanol to oxygenate the gas. We also happen to have a lot of corn and many ethanol plants. So yeah, more expensive ethanol may force up the cost of gasoline, but probably not as much as swings in the price of a barrell of crude. The price of crude oil swings up despite lower demand and plentiful supply- it's all based on speculation. Oil and gas are both traded as commodities, and the smalles hint of some type of trouble (storms in the Gulf, Iran threatining to seal off the strait, some guy working at a refinery calls in sick, etc......) sends the prices up. Gas around here has spiked up at least $0.20/gal in the past few day.
Hooray..........

 

[Boomyal]

Re: Gas price increase due to reduced corn crops?

Ethanol is cheaper than gas only because it is heavily subsidized by you know who. Otherwise it would cost more by volume than gasoline. Now that there is stress in the corn fields, the price of ethanol will skyrocket and you know who will pay the freight and pass it on to us suckers!

 

[Boomyal]

Re: Gas price increase due to reduced corn crops?

....Now lets keep poloticing out of this

Now why in heavens name would we want to do that? Politics is what drives this mess!

 

[Tail_Gunner]

Re: Gas price increase due to reduced corn crops?

Now why in heavens name would we want to do that? Politics is what drives this mess!

Actually its POLOTICING and Is a MA topic. Now calm down soon enough the winds will blow gently in a new direction ...Think Hurricane

 

[mscher]

Re: Gas price increase due to reduced corn crops?

Ethanol is cheaper than gas only because it is heavily subsidized by you know who. Otherwise it would cost more by volume than gasoline. Now that there is stress in the corn fields, the price of ethanol will skyrocket and you know who will pay the freight and pass it on to us suckers!

Being factual, not political, Ethanol subsidies expired in 2011.

 

[PiratePast40]

Re: Gas price increase due to reduced corn crops?

Being factual, not political, Ethanol subsidies expired in 2011.

That's why I was wondering about price increases. Since use of ethanol is mandated, price supports are gone, and there are shortages, what will the market do? Another interesting question is the issue of crop insurance. I can understand the issue of insurance and payments matching market price but is is right for the insurance policies to also cover the crops that are not being used for food?

 

[Scott Danforth]

Re: Gas price increase due to reduced corn crops?

no, your taxes will go up due to the subsidation of ethanol. also your food prices will go up since corn is also a feed product.

gas prices will only go up because the oil companies want profit. not because of supply/demand.

 

[Outsider]

Re: Gas price increase due to reduced corn crops?

Being factual, not political, Ethanol subsidies expired in 2011.

Uh, I believe the subsidies survived in the last minute debt limit BS last December. There is already talk of not extending them, again ...

 

[WIMUSKY]

Re: Gas price increase due to reduced corn crops?

There is no question gas prices will go up. Even now, if someone farts at the wrong time in the middle east prices go up. It's already been on the news that dairy and beef prices are going up too. I believe 5%, but don't quote me.....

 

[Scott Danforth]

Re: Gas price increase due to reduced corn crops?

Being factual, not political, Ethanol subsidies expired in 2011.

no, its still there, just buried in the RFS

The RFS mandates that at least 37 percent of the 2011-12 corn crop be converted to ethanol and blended with the gasoline that powers our cars…[As a result] the current price of corn on the Chicago Mercantile Exchange is about $6.50 per bushel—almost triple the pre-mandate level.

 

[Boomyal]

Re: Gas price increase due to reduced corn crops?

......—almost triple the pre-mandate level.

Hence we have another Federal unfunded mandate! That means we pay thru the nose for it.