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THE Price of Crude pt 14

General discussions of the systemic, societal and civilisational effects of depletion.

Re: THE Price of Crude pt 14

Unread postby vtsnowedin » Wed 03 Jan 2018, 14:44:28

ROCKMAN wrote:vt - Not so much fuzzy math but the nature of the system. To the best of my knowledge during the last 4 decades I have not worked for a company that has sold a single bbl of oil to a refinery. I know for a fact I haven't sold any oil to a refinery in the last 9 years. I've sold every bbl to an oil marketing company such as Plains Resources. They might have sold some/every one of my bbls to a refinery, an oil speculator that sent it to storage, to the SPR or to an overseas buyer. But regardless I reported every bbl as production.

Which brings up a question: what exact does oil "consumption" mean: oil sold by producers; oil sold by oil marketing companies; oil bought by refineries; oil used to make oil products bought by consumers?

The EIA glossary doesn't define "oil consumption". This is the closest I could find:

Crude oil acquisitions (unfinished oil acquisitions): The volume of crude oil either:
•acquired by the respondent for processing for his own account in accordance with accounting procedures generally accepted and consistently and historically applied by the refiner concerned, or
• in the case of a processing agreement, delivered to another refinery for processing for the respondent's own account.

Crude oil that has not been added by a refiner to inventory and that is thereafter sold or otherwise disposed of without processing for the account of that refiner shall be deducted from its crude oil purchases at the time when the related cost is deducted from refinery inventory in accordance with accounting procedures generally applied by the refiner concerned. Crude oil processed by the respondent for the account of another is not a crude oil acquisition.

Your talking bureaucratize to an ex bureaucrat :o
Except for KSA very little crude in the world is used as it came from the well so it all the rest goes through a refinery sooner or later. You can count it when it comes from the well or when it goes into the refinery or blender plant but the total should come out the same. Into storage,out of storage into a boat and tour the world it will all get turned into usable products somewhere some time.
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Re: THE Price of Crude pt 14

Unread postby vtsnowedin » Wed 03 Jan 2018, 15:11:57

Outcast_Searcher wrote:
vtsnowedin wrote:
Outcast_Searcher wrote:
So barring the economic armageddon the fast-crashers tend to forecast several times a year or more, the odds of increasing demand over the next 5 years or so look pretty solidly baked into the cake. (Net ICE production will FAR outpace any demand reduction from EV's for that timeframe in aggregate, IMO).

I would not be so sure about that. If supply tightens considerably the first response will be a significant rise in prices which may in fact already have begun. While far from Armageddon a significant price rise will hold back or even depress demand world wide. A new ICE vehicle becomes out of the question if you can't afford the fuel for it.

REALLY? We're going to say that again?

Look, as KJ and others have shown, the projections are for roughly 60ish million new ICE's net a year. What I'm talking about is comparing that to the under 5 million EV's a year we're all but certain to see over the next 5 years.

For people who can afford new cars, the price of gasoline at, say $4 or $5 vs. $2.50 is a mere annoyance for the VAST majority of buyers. If they need another car because theirs has become reliable, do you think they'll walk 5 or 50 miles to work? No, but they might well buy a Corolla instead of an F-150 or equivalent SUV, if finances become a concern.

Buying a $20,000ish Corolla over a $50,000ish fancy truck or SUV saves $30,000ish.

With the average person driving 13,000ish miles a year, the fuel cost for 500ish gallons of gas is in the range of $1200ish to $2500ish under that scenario. And of course, they burn a lot LESS gas buying a reasonably efficient vehicle.

The scale is completely different.

No matter how many times pstarr and the ETPers claim that people buying new cars can't afford gasoline if the price rises a little (or even a lot), in the main, is, complete BULLSH*T. (I'm not talking about a few people on the borderline of affording a new ICE -- I'm talking about mainstream consumers).

Look, even my POOR friends, including one who literally lives in his car, don't quit driving a LOT when gas gets to $4.00 or so. They rant and rave and complain and bitch -- and they buy the gasoline, keep right on driving as normal, and presumably buy less or cheaper other things to make up the difference.

Now, imagine this scenario for "comfortable" people buying new ICE's at an average transaction price of meaningfully over $30,000. Even $5.00 a gallon is just an annoyance (and lots and lots of braying/whining), for such people.

Where to begin?
I must say that is one of the most mindless posts here in a long time.
Do you need to check your meds or lay off the booze?
Gas going from $2.50 to $5.00 is important even for a middle class American that is considering a new truck vs a Corolla. Over 100,000 miles which is how far you will go while the payments last the truck will consume 6250 gallons of gas or $31,250 making truck and gas cost over 100K. If he chooses the Corolla that same 100,000 miles will eat up just 2860 gallons of gas or $14,300 so with a 20K price tag you are looking at about 34K for the same 100,000 miles. Maybe 66K is a drop in the bucket for you but a lot of Americans that would like to drive around in that big honking truck would run out of debit card somewhere between the truck with $2.50 gas and the truck and $5.00 gas and would choose the Corolla or something in between them. Everyone that chooses the Corolla will have reduce their fuel demand by half. But now let us turn and look at world demand for ICE cars. The bulk of that is now in China and India where very few would even aspire to a full sized American SUV or pickup and are much closer to the end of the money each month. A doubling of gas prices will of course push them to cars even more efficient then the Corolla if not push them out of the market altogether leaving them to carry on as they are now.
There is now a strong demand for new cars in these countries at present fuel prices but let prices double and that demand will evaporate faster then gas on a hot manifold.
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Re: THE Price of Crude pt 14

Unread postby Outcast_Searcher » Wed 03 Jan 2018, 15:31:35

vtsnowedin wrote:Where to begin?
I must say that is one of the most mindless posts here in a long time.
Do you need to check your meds or lay off the booze?

If THAT"s going to be the level of your discourse, I'm happy to shove you in the ignore bin along with pstarr. How about acting like an adult?
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Re: THE Price of Crude pt 14

Unread postby Outcast_Searcher » Wed 03 Jan 2018, 15:38:14

vtsnowedin wrote:A doubling of gas prices will of course push them to cars even more efficient then the Corolla if not push them out of the market altogether leaving them to carry on as they are now.
There is now a strong demand for new cars in these countries at present fuel prices but let prices double and that demand will evaporate faster then gas on a hot manifold.

Sigh. Demand being reduced is NOT demand evaporating. But dream on.

If you're going to just ignore all reasonable arguments and resort to name-calling, fine.

My point that people can buy much cheaper and more fuel efficient ICE's if they need or want a new car stands. My point that much more fuel efficient cars burn a lot less gas stands.

In my example of a Ford F-150 vs a Corolla, even a doubling of the gas price would result in little change in the annual fuel expense. But they buyer would still save a considerable amount on the purchase. Even if they actually "couldn't afford" more expensive gas.

Exaggerating and making stuff up will only convince people who are already on the economic fast crash doom kool-aid.

I never said it made no difference. But subtlety seems to escape you in this discussion as much as arithmetic.
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Re: THE Price of Crude pt 14

Unread postby vtsnowedin » Wed 03 Jan 2018, 15:41:21

Outcast_Searcher wrote:
vtsnowedin wrote:Where to begin?
I must say that is one of the most mindless posts here in a long time.
Do you need to check your meds or lay off the booze?

If THAT"s going to be the level of your discourse, I'm happy to shove you in the ignore bin along with pstarr. How about acting like an adult?

Feel free. I thought I would not embarrass you by pointing out every stupid point in your post.
This little gem here for example.
For people who can afford new cars, the price of gasoline at, say $4 or $5 vs. $2.50 is a mere annoyance for the VAST majority of buyers. If they need another car because theirs has become reliable, do you think they'll walk 5 or 50 miles to work? No, but they might well buy a Corolla instead of an F-150 or equivalent SUV, if finances become a concern.

Whose old car becomes reliable? And you agree that people will choose a car with better gas mileage which would decrease fuel demand , that proves my point.
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Re: THE Price of Crude pt 14

Unread postby vtsnowedin » Wed 03 Jan 2018, 15:46:03

Outcast_Searcher wrote:My point that people can buy much cheaper and more fuel efficient ICE's if they need or want a new car stands. My point that much more fuel efficient cars burn a lot less gas stands.

And burning less gas reduces demand for gas.
I don't need to call you names. You are embarrassing yourself.
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Re: THE Price of Crude pt 14

Unread postby kublikhan » Wed 03 Jan 2018, 19:42:39

ROCKMAN wrote:goner - And this is where I still have a problem with their concept of an "oversupplied market". In my petroleum world a market is over supplied when I have no buyer for my oil. IOW I have to shut in some of my wells. To the best of my knowledge no producer in the world has had to do so to any meaningful level. IOW every bbl produced has been sold: to a refinery or to a speculating buyer sending it to storage.

It seems many are basing the "oversupplied" concept based on the price of oil. So they say the market is oversupplied when oil was $40-$50 per bbl. I that case the market has been grossly oversupplied for the vast majority of the petroleum age since its average inflation adjusted price has been lower for the vast majority of the period. But I didn't see much oversupply talk when oil hit $40/bbl around 2006. In fact just the opposite: lots of reports about a developing "tight" oil market and concerns over the inflation of oil prices.

Or put it this way: the oil market is "oversupplied" because the current price is significantly higher then it has been for most of the petroleum age. And that makes sense to some people???

And now oil has reached a record high over the last 2 years. In fact it is now selling 100% more then it was at its lowest recent price. So that represents an "oversupplied market": oil prices double in a couple of years???
If you want to see if the market is oversupplied, don't look at price. Look at oil inventory levels. In 2006 there was not an abnormal amount of oil in storage. Today there is. There is more oil in storage now than at anytime in the last 30 years. You can view OECD data here:

OECD End-of-period Commercial Crude Oil and Other Liquids Inventory, Annual

Notice the spike in the amount of oil going into storage during 2014 and 2015? Since OECD storage tends to be the cheapest way to store oil, it also tends to be the first to fill up and the last to drain. The graph shows oil storage not growing during 2016 however this does not include other oil storage options like floating storage, Non-OECD storage, etc which continued to grow in 2016. Now that the market has moved into backwardation, storing oil is a less attractive option for speculators and some of the excess oil in inventory has started to drain. The sharpest decrease in oil storage are naturally coming from the more expensive storage locations like floating storage. However even the OECD inventories saw a bit of a dip in 2017 as inventories drain. So the oil market tightened up a bit in 2017. IE, the OPEC cuts are working. For now anyway. There is some speculation that inventories could start growing again if OPEC floods the market with oil after the cuts expire.

OECD refining centers contain lots of inexpensive storage options which make them the preferred choice for holding non-operational or speculative inventories. The result is that storage tanks in the OECD tend to be the first to fill during a period of oversupply and the last to empty when global stocks are falling.

There is some evidence excess global inventories have already fallen, with reductions in oil-exporting countries, floating storage and remote locations. Excess stocks are gradually being pulled along the supply chain from producers, floating storage and remote locations toward the major refining centers in the OECD. But the behavior of the supply chain introduces an important non-linearity into the response of OECD stocks to OPEC’s production policy. OECD stocks are likely to fall slowly at first, then accelerate once producer stocks and floating storage have been emptied. As a result, OPEC’s production policy often tends to appear relatively ineffective at first before gaining traction later. In this instance, the stubbornly high level of OECD oil inventories during the first quarter of 2017 may have masked a broader tightening in the supply-demand-inventory balance.
Oil inventories become more visible

The amount of oil stored on tankers around Singapore has dropped sharply in the last months, the latest indication that OPEC-led supply cuts are successfully tightening crude markets even as U.S. exports have soared. Shipping data in Thomson Reuters Eikon shows around 15 super-tankers are currently filled with oil in waters off Singapore and western Malaysia. That is half the number of ships in June and down from 40 tankers holding surplus fuel in mid-2017.

The drop in floating storage around Asia’s main oil-trading hubs comes in the wake of voluntary production cuts led by the Organization of the Petroleum Exporting Countries (OPEC) and Russia as they look to choke off a supply overhang that has dogged markets for years. “There are less incentives for traders to hold crude given rising crude oil prices and premiums. So to some extent, the OPEC cuts have worked.” Brent crude futures are up more than 40 percent since July to almost $64 per barrel. Also, the Brent forward curve shows contracts for future delivery are cheaper than spot supplies, a condition known as backwardation which makes it unattractive to store oil. “The (backwardation) structure has flushed out oil in storage.” Tighter supplies are also evident in physical oil markets.

Despite the tighter market, energy consultancy FGE warned this week that due to rising U.S. shale production and a potential jump in OPEC supplies after the end of its voluntary cuts, a supply glut could re-emerge. “This may result in lower prices in 2019.”
Sinking feeling: Asian floating oil storage declines as crude market tightens
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Re: THE Price of Crude pt 14

Unread postby GoghGoner » Thu 04 Jan 2018, 07:52:20

K, thanks for that Quandl link -- I didn't know EIA data was available thru their API which I absolutely love -- my gawd, I have some work to do now :)

There is something wrong with the graph of the OECD inventories, though. It doesn't match anything that I am looking at. I don't have time right now to sort it out right now but when I get to it, I'll post something.
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Re: THE Price of Crude pt 14

Unread postby GoghGoner » Fri 05 Jan 2018, 11:48:11

Since that number above includes liquids, I am not sure what to think about it. I did notice that looking at the same data on the EIA website, they show that the last 3 years are estimated.

Here are the latest crude numbers (all show a sharp drop in 2017):

OPEC estimates that total stocks were around 137 million barrels higher than the five-year average in October, down by around half since May (“Monthly Oil Market Report”, OPEC, December 2017).

IEA puts commercial stocks about 111 million barrels above the prior five-year average at the end of October (“Oil Market Report”, IEA, December 2017).

EIA data shows commercial stocks 167 million barrels above the five-year seasonal average at the end of October, down from a surplus of 380 million barrels in July 2016
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Re: THE Price of Crude pt 14

Unread postby Outcast_Searcher » Fri 05 Jan 2018, 12:19:24

vtsnowedin wrote:
Outcast_Searcher wrote:My point that people can buy much cheaper and more fuel efficient ICE's if they need or want a new car stands. My point that much more fuel efficient cars burn a lot less gas stands.

And burning less gas reduces demand for gas.
I don't need to call you names. You are embarrassing yourself.

Where did I say or imply that burning less gas does NOT reduce demand for gas.

Are you now going to lie to try to make a point?

If semantics games and name calling is the level of discourse, look in the mirror and consider who should be embarrassed.
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Re: THE Price of Crude pt 14

Unread postby kublikhan » Fri 05 Jan 2018, 17:55:57

GoghGoner wrote:Since that number above includes liquids, I am not sure what to think about it. I did notice that looking at the same data on the EIA website, they show that the last 3 years are estimated.

Here are the latest crude numbers (all show a sharp drop in 2017):

OPEC estimates that total stocks were around 137 million barrels higher than the five-year average in October, down by around half since May (“Monthly Oil Market Report”, OPEC, December 2017).

IEA puts commercial stocks about 111 million barrels above the prior five-year average at the end of October (“Oil Market Report”, IEA, December 2017).

EIA data shows commercial stocks 167 million barrels above the five-year seasonal average at the end of October, down from a surplus of 380 million barrels in July 2016
I think including all liquids is the best way to go. That way you get a better picture of the total supply picture instead of potentially getting a skewed view because crude stocks might fall sharply but gasoline/diesel stocks spike up. As for measuring month to month, if you do it that way you end up picking up seasonal variations. So I prefer to look at annual data. Annual EIA data shows a fall of only 25 million barrels in total liquids for 2017. And are projecting a growth of 43 million barrels for 2018.

IEA is projecting stocks flatlining overall in 2018:
Our current outlook 2018 may not necessarily be a happy New Year for those who would like to see a tighter market. Total supply growth could exceed demand growth: indeed, in the first half the surplus could be 200 kb/d before reverting to a deficit of about 200 kb/d in the second half, leaving 2018 as a whole showing a closely balanced market. A lot could change in the next few months but it looks as if the producers' hopes for a happy New Year with de-stocking continuing into 2018 at the same 500 kb/d pace we have seen in 2017 may not be fulfilled.
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Re: THE Price of Crude pt 14

Unread postby GoghGoner » Sat 06 Jan 2018, 08:22:34

K, I don't mind metrics on total liquids but crude inventories are also useful since not all liquids are created equal (ie ethanol has less energy than oil per barrel).

There is something wrong with that number you are quoting again. Here is an EIA graph which is correct. It shows the glut has greatly receded.

Image
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Re: THE Price of Crude pt 14

Unread postby Outcast_Searcher » Sat 06 Jan 2018, 12:48:54

GoghGoner wrote:K, I don't mind metrics on total liquids but crude inventories are also useful since not all liquids are created equal (ie ethanol has less energy than oil per barrel).

There is something wrong with that number you are quoting again. Here is an EIA graph which is correct. It shows the glut has greatly receded.

Image

1). At the risk of asking the obvious, could some simple, reasonably objective compromise be reached that indicated the number of total barrels AND the amount of total energy available (or something similar)? That would hopefully reduce skew/distortion enough for people who are trying to get a real look at the overall trend in liquid fuel energy available.

2). It seems to me that generally, if the EIA graph is anything close to accurate, then the oil markets are working well re the pricing mechanism. Financial markets try to look ahead at expected conditions, and that overall supply trend looks to be a good indication that prices deserve to rise until that trend meaningfully changes, especially given that global demand is likely to continue rising, as normal.

3). Since modern ICE's run OK with a percentage of ethanol often enforced, clearly ethanol is a realistic part of the supply picture, unless policy mandating it and subsidies for it end, causing it to diminish greatly or stop being used altogether for transport fuels.
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Re: THE Price of Crude pt 14

Unread postby Tanada » Sat 06 Jan 2018, 14:04:37

Let me pipe up for a moment on the all liquids argument.

Ethanol and Methanol are at the very small end of fuel molecules just like their hydrocarbon analogs methane and ethane. Therefore they have inherently less mass and less energy on a per unit volume basis. However by the same token heated asphalt liquid residual oil has a great deal of energy because its molecules are on the very heavy end of the same spectrum. If you heat asphalt up to about 95 degrees C or 200 degrees F you can run it through a large diesel engine and get a quite impressive level of energy out of the fluid.

That works great for large cargo ships equipped with marine diesels but not so great for the motor in your VW personal car. The crucial reason for counting ethanol in with regular fuel is the changes to run your gasoline engine on 100% ethanol are trivial while making the same changes to run even regular Diesel #2 in that same engine are prohibitively expensive. The energy difference is minor, no different in scale than the difference between Diesel #2 and Gasoline for Gasoline and Ethanol. Add in the fact that we don't run straight ethanol unless you modified your own engine or bought an E-85 complaint vehicle and it makes even less sense to worry overmuch about ethanol getting counted as fuel. It gets mixed into about 85 percent of all gasoline in the USA at the blending plant where it increases the volume 10% and reduces the energy content about 5%

IOW it isn't a big enough difference to worry about. If you ever want to restore your car fuel to straight gasoline energy content then dump 3 liters of Kerosene in the tank right before you fill up with Gasohol the next time around. Otherwise stop worrying about it.
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Re: THE Price of Crude pt 14

Unread postby vtsnowedin » Sat 06 Jan 2018, 14:05:01

Outcast_Searcher wrote:
3). Since modern ICE's run OK with a percentage of ethanol often enforced, clearly ethanol is a realistic part of the supply picture, unless policy mandating it and subsidies for it end, causing it to diminish greatly or stop being used altogether for transport fuels.

If the ethanol mandates and subsidies were removed the only reason to include it in the gas formulation is as an oxygenater which they use to obtain the different octane levels and reduce carbon monoxide emissions in cold winter states.Instead of the ten percent figure used today some much smaller amount would be used with usually nothing in the summer months.
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Re: THE Price of Crude pt 14

Unread postby Outcast_Searcher » Sat 06 Jan 2018, 14:34:09

Tanada wrote:IOW it isn't a big enough difference to worry about. If you ever want to restore your car fuel to straight gasoline energy content then dump 3 liters of Kerosene in the tank right before you fill up with Gasohol the next time around. Otherwise stop worrying about it.

Good point. I was just trying to find some agreement. If we had some agreed upon standards to report things and discuss things here generally, then maybe we could focus more on concepts and likely big picture trends, instead of worrying about (or obfuscating) issues like this detail (which is, as you point out, quite minor re total energy in liquid fuels).
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Re: THE Price of Crude pt 14

Unread postby kublikhan » Sat 06 Jan 2018, 16:01:54

GoghGoner wrote:K, I don't mind metrics on total liquids but crude inventories are also useful since not all liquids are created equal (ie ethanol has less energy than oil per barrel).
The amount of ethanol in US storage is tiny compared to other inventory. Most of the additional liquids we are talking about are gasoline, diesel, etc. And since other OECD countries use negligible amounts ethanol we are talking really tiny amounts in OECD storage.

GoghGoner wrote:There is something wrong with that number you are quoting again. Here is an EIA graph which is correct. It shows the glut has greatly receded.
That graph is not inventory levels. It is inventory levels minus the 5 year average. The actual inventory levels from your source are the exact same numbers as the source I was using.

Your source:
OECD commercial liquids inventories barrels
July 2016: 3.09 billion
Nov 2017: 2.95 billion
Short Term Energy Outlook

My source:
OECD End-of-period Commerical Crude Oil and Other Liquids Inventory, Monthly
July 2016: 3.090 billion
Nov 2017: 2.953 billion
OECD End-of-period Commerical Crude Oil and Other Liquids Inventory, Monthly

Because the 5 year average is starting to include more and more high inventory months like 2015, 2016, and 2017, it is going to be pulled higher and high. That is why the EIA cautions that using a metric like this can be deceptive:

Going forward, the five-year average will include a higher proportion of data points from 2015-17, which were years of high inventory levels, resulting in higher five-year average stock levels for comparison. Although EIA forecasts OECD inventories to increase by 51 million barrels from December 2017 through May 2018, the level of OECD inventories relative to the five-year average is expected to decrease by 29 million barrels because of the increase in the five-year average.
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Re: THE Price of Crude pt 14

Unread postby vtsnowedin » Sat 06 Jan 2018, 21:27:58

Tanada wrote:Let me pipe up for a moment on the all liquids argument.
..........
Add in the fact that we don't run straight ethanol unless you modified your own engine or bought an E-85 complaint vehicle and it makes even less sense to worry overmuch about ethanol getting counted as fuel. It gets mixed into about 85 percent of all gasoline in the USA at the blending plant where it increases the volume 10% and reduces the energy content about 5%

IOW it isn't a big enough difference to worry about.

I think 920,000 barrels of ethanol a day needs to be worried about. If the EROEI of corn ethanol is not positive we need to stop wasting time and farmland on it.
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Re: THE Price of Crude pt 14

Unread postby Tanada » Sat 06 Jan 2018, 23:09:21

vtsnowedin wrote:
Tanada wrote:Let me pipe up for a moment on the all liquids argument.
..........
Add in the fact that we don't run straight ethanol unless you modified your own engine or bought an E-85 complaint vehicle and it makes even less sense to worry overmuch about ethanol getting counted as fuel. It gets mixed into about 85 percent of all gasoline in the USA at the blending plant where it increases the volume 10% and reduces the energy content about 5%

IOW it isn't a big enough difference to worry about.

I think 920,000 barrels of ethanol a day needs to be worried about. If the EROEI of corn ethanol is not positive we need to stop wasting time and farmland on it.


First off as has been pointed out endless times EROEI can be made to say somewhat near what the person using it wants to say simply by adding or subtracting energy needs for any given process. Want your EROEI to be high? Then use a few variables as you can get away with and always use the ones that are towards your desired result. Want EROEI to be low? Throw in every variable you can find an excuse for and use the most pessimistic assumption available for its individual energy cost. People who hate CORN ETHANOL claim it has from 1.34 to -1 EROEI while completely ignoring the fact that the vast bulk of fuel ethanol on the planet comes from much more sensible sources than 'corn likker' as the biological source material. Even if you are just talking about US Iowa Corn Ethanol then you are back to the issue of whose assumptions do you use and what makes their assumptions better than the people advocating a high EROEI for the same process?

Secondly 920,000 bbl is 10% of gasoline consumption just as expected and that 10% only lowers your gasoline energy content 4 or 5 percent. Even if you do an honest assessment and the Corn Ethanol EROEI is 1.34:1 because you add a bunch of natural gas energy to operate the distillers and keep the tanks warm and what not so what? You are transferring the energy of the natural gas which is abundant and cheap into a liquid with greater utility as a vehicle fuel. That is substitution 101.
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Re: THE Price of Crude pt 14

Unread postby vtsnowedin » Sun 07 Jan 2018, 06:57:03

Having lost a chainsaw and a couple of other small engines to ethanol poisoned fuel I am far from unbiased on the subject but let me try this exercise.
Take one gallon of pure gas pre tax at $1.60 per gallon. in your car it gets 35mpg so cost 4.571 cents per mile. Now take nine tenths of a gallon of gas $1.44 and add one tenth gallon of ethanol at $2.10 a gallon (subsidized 51 cents a gallon) so 1.44+0.21=1.65/ gallon of E10. Now E10 has 5 percent less energy so your gas mileage drops to 33.25 MPG so 1.65/33.25=4.962 cents per mile. 4.962-4.571=0.39 cents per mile which doesn't seem like much but when you multiply it by the 3.22 Trillion miles Americans drove last year it comes out to 12.5 Billion dollars wasted. Then consider that the fleet average for US cars is not 35mpg but 23.6 using E10.
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