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| Re: [GMCnet] Ethanol - but we already knew [message #276522 is a reply to message #276516] |
Thu, 23 April 2015 09:52  |
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thesmith
Messages: 589
Registered: February 2015
Location: Cary, NC
Karma: 6
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Simple. Ethanol plants and production cannot be simply started and stopped overnight based on a cost of oil that is very unstable (say Israel nukes Iran tomorrow.....ISIS takes over Saudi Arabia etc). In any case adding to the demand for gasoline
by stopping production of ethanol would almost certainly push the price back up.
Whats most important in fuel (and many other) markets is stability of supply, not the price per gallon. Demand (at least in the short and medium term)is pretty inelastic irregardless of price but
an actual shortage creates much much more problems, such as panic buying and hoarding, problems in the transport of people and goods etc etc.
Then there is the effect on farmers by the sudden big drop in corm demand..........
People might moan about the cost of fuel, food etc but they are much less happy if they can't get any!
So we pay more on average and have ethanol in our gas, but in return we get a more stable supply.
Pete
Dolph Santorine wrote on Thu, 23 April 2015 08:44With the unsubsidized price of ethanol being higher than gasoline right now, why not let the marketplace decide.
At least it's getting some media attention -
http://www.exxonmobilperspectives.com/2015/03/12/jay-leno-ethanol-should-go-the-way-of-prohibition/?utm_source=Outbrain&utm_medium=cpc&utm_cam paign=Perspectives_-_Full_Site
Dolph
DE N8JPC
Wheeling, West Virginia
1977 26' ex-PalmBeach
1-Ton, Sullybilt Bags, Reaction Arms, 3.70 LSD, Manny Transmission, EV-6010
"The Aluminum and Fiberglass Mistress"
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Cary, NC
1978 Center Kitchen Royale.
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