Plans for ethanol plant on hold.

[Anonymous]

Humor me for a minute,

OK, if I'm already burning 93 octane gas in my Mustang, I'd suppose going to E-85 should give me quite a horsepower jump, shouldn't it, since it's 103 octane? I get between 21-22 mpg. Would that go down, or stay the same? Would I have to re-re-program my chip too? I don't know much about E-85, and I haven't come across any to try, but from what you guys have said tonight I'd like to try a tank full.

If I've gotten too far off topic, I'm sorry, just tell me so, but this is the first really good discussion I've read about different fuels like this. I think this is interesting, 'specially coming from railfans' perspectives!

Also, one thing that hasn't been mentioned...Nothing smells better than about 20 sprint cars on a humid Saturday night belching out methanol exhaust!

mike

[Anonymous]

What was the shortline viability rule of thumb? 100 carloads per mile per year?

How many carloads minimum would probably ship from this plant each year, more than a few hundred?

If so, then UP can more than afford to pay for a few miles of upgraded spur line. Remember, this plant will be captive to UP, which means UP is getting up to 400% of revenue to variable costs.

Obviously, something else is going on with the railroad's management to derail this project. Something other than reasoned logic and up front honesty.

But as mudchicken points out, the railroads are right and everyone else is wrong!

[Anonymous]

QUOTE: Originally posted by jakebud

TomDiehl and Farmer 03

You guys seem to pay no attention to the thought that in order make ethanol, you have to plow a field, fertilize, plant, harvest, and move the corn to an ethanol plant. Best as I can tell, all of those processes use diesel fuel in trucks and tractors, and that comes from petroleum. Why don't you take a look at how much fuel is used to produce ethanol before its less than wonderous virtues are touted.

SPIKE

What you don't understand is that the money used to make and made from ethanol is kept DOMESTIC. And I don't know of a farmer producing said corn for ethanol who doesn't use bio-diesel. Yea, lets dump some more MTBE into our gasoline and poison the next (my) generation. Sweet deal!

[TomDiehl]

QUOTE: Originally posted by jakebud

TomDiehl and Farmer 03

You guys seem to pay no attention to the thought that in order make ethanol, you have to plow a field, fertilize, plant, harvest, and move the corn to an ethanol plant. Best as I can tell, all of those processes use diesel fuel in trucks and tractors, and that comes from petroleum. Why don't you take a look at how much fuel is used to produce ethanol before its less than wonderous virtues are touted.

SPIKE

And where did you get the idea I said it was a wonderous fuel? I said it's safe and quite possible to run in standard gasoline engines when combined with gasoline. In the small, start up quantities, it probably won't be much of a savings, but developing and using a domestic source of energy is preferable to funding terrorists with our lust for petroleum based fuels. Going with your statement, it sounds like we should do nothing. Not a viable option.

[mudchicken]

QUOTE: Originally posted by Murphy Siding

QUOTE: Originally posted by mudchicken
. Some things never change, just this case is larger than most. Sioux Falls really got in over it's head; Uncle Pete may have just done them a huge favor. Hopefully they do a better job at due-dilligence from this point forward.

Yikes![:0] Sioux Falls and Sioux City are 2 different places, 90miles apart![xx(]

Whoops ...meant the the south Sioux one[:I][:I][:I] (The bigger burgh )

[MP173]

yeah, something doesnt make sense here.

$2million to upgrade a rail spur on a $140million project is NOT a deal breaker.

My guess is they decided to pull out due to something else.

Here is something to consider...

Assume that UP's profit margin is 15% on railcar. Lets assume that their freight rates for hauling the railcar are $900 per car. Assuming that, then the $2million (remember they said 2 to 3 million dollar rail spur) would require $13,333,333 dollars of freight revenue before it achieved a break even point.

At $900 revenue per car that is 14, 815 cars before break even. At 15 cars per day that is 988 days or nearly 4 years of 5 day a week shipping.

And that assumes the plant would ship via rail...

Interesting way to look at the numbers.

ed

[DSchmitt]

From http://www.nuclear.com/


ETHANOL - BRAZIL EXPERIENCE

Brazil can also draw on the experience of its 30-year-old fuelÊalcohol programme, which was launched after the 1973 oil crisis.

Fuel alcohol or ethanol produced with sugar cane has replacedÊa large part of the petrol consumed in this country of 178 million.ÊNearly 20 percent of the cars in Brazil run exclusively on ethanol.

In addition, all of the petrol consumed in the country consistsÊof 20 to 25 percent fuel alcohol, which saves on oil imports andÊreduces air pollution and smog.

Brazil produces around 16 billion litres of ethanol -- half ofÊthe total global production -- of which 14.5 billion litres areÊconsumed domestically. Exports are expected to rise fourfold by theÊend of next year.

... Proalcohol emerged in response to an emergency: the suddenÊskyrocketing of international oil prices. Brazil imports over 80Êpercent of the petroleum and by-products consumed domestically.

Proalcohol required heavy government subsidies, and theÊexpansion of sugar cane cultivation caused serious environmentalÊand social problems in the countryside.

In addition, insufficient production in the early 1990s led toÊshortages and a lack of confidence in the new fuel, with demand forÊcars running exclusively on fuel alcohol dropping practically toÊzero.

But the manufacturing of "dual fuel" cars, which can run onÊeither petrol or ethanol, or a blend of the two in any proportion,Êis swiftly restoring the credibility of the government's ProalcoholÊprogramme.

Source: Mario Osava (IPS - Rio de Janeiro), "Environment-Brazil: New Tests Back Biodiesel Fuel", IPS-Inter Press Service, September 1, 2004



From the Washington Post


Brazil's Biofuel Strategy Pays Off as Gas Prices Soar

By Dan Morgan
Washington Post Staff Writer
Saturday, June 18, 2005; Page D01

PRADOPOLIS, Brazil -- Outside the cavernous Sao Martinho refinery, the air smells of molasses as a quarter-mile-long caravan of trucks piled high with sugar cane waits to unload cargo, signs that the world's largest sugar harvest is moving into high gear.

Such bumper sugar crops have often meant worldwide gluts, low prices and headaches for politicians in the more than 100 countries where sugar cane is grown, but not this year in Brazil. About half the cane brought here will be made into ethanol as part of a 30-year gamble to substitute fuels made from crops for imported oil.


The Sao Martinho refinery makes ethanol out of sugar cane. The process is cheaper than the U.S. method, which uses corn. (By Joshua Cogan For The Washington Post)


As international oil prices soar, that bet has put Brazil at the forefront of a "biofuels" movement in which many countries view sugar cane, corn, soybeans, beets, cornstalks and native grasses as cleaner, money-saving substitutes for oil produced in politically unstable countries. Ethanol is higher in power-producing octane than most gasoline and can reduce tailpipe emissions of carbon monoxide and harmful particulates.

The trend in Brazil has far-reaching implications for environmental policy, trade and economic development in poor countries that may have a bright future producing crops that can be easily turned into fuels. Biofuels also could be alternatives for U.S. farmers facing cuts in large federal farm subsidies on traditional crops, according to some agricultural economists.

Congress, the Bush administration and U.S. industry are aware of ethanol's potential. During Senate floor debate Thursday on major energy legislation, Sen. Maria Cantwell (D-Wash.) said Brazil's example showed that biofuels were one way to break the "addiction" to imported oil.

Efforts to gain wide acceptance in the United States have faced political, economic, and technical obstacles not present in Brazil.

President Luiz Inácio Lula da Silva has vowed that his country will become the world's leader in renewable energy. It is already the largest producer and exporter of ethanol, sending half a billion gallons a year to a dozen countries, including the United States.

"We don't want to sell liters of ethanol, we want to sell rivers," Agriculture Minister Roberto Rodrigues told Japanese Prime Minister Junichiro Koizumi last year.

About a third of the fuel Brazilians use in their vehicles is ethanol, known in Brazil as "alcohol." That compares with 3 percent in the United States. All gasoline sold in Brazil contains at least 26 percent ethanol, but motorists driving flexible-fuel cars have the option of filling up with pure ethanol, or E100, which currently is selling for about half the price of the blend.

Use of pure ethanol will rise sharply as carmakers in Brazil such as General Motors and Volkswagen make more flexible-fuel cars. Half the new vehicles sold this year will be able to use either pure ethanol or the blend, according to the Sao Paulo Sugar Cane Industry Union.

In the United States, the sugar-cane industry has had little incentive to diversify into ethanol production because import quotas support U.S. sugar prices far above world levels. Expansion of sugar cane acreage beyond Hawaii, Florida and the Gulf Coast is limited by the need for a long, frost-free growing season. The House-passed energy bill would authorize a three-year demonstration program for producing ethanol from sugar cane.

Most U.S.-produced ethanol is now made from ground corn in a process that has been faulted as inefficient. Corn yields less sugar per acre than sugar cane, and the refining uses substantial amounts of energy. To keep ethanol competitive with gasoline, major refiners such as Archer Daniels Midland Co. have relied since the 1970s on a tax subsidy, now 51 cents a gallon.


------------------------------------------------------------------------------------------------------------------------

Overall ethanol has worked quite well for Brazil where it is prodused from sugar cane which is a crop which grows in abundance there and has limited other uses.

In the US ethanol is made from grain which is less efficient than cane. Grains also may be more be more valuable as food for man and livestock..

[Murphy Siding]

QUOTE: Originally posted by mudchicken
. Some things never change, just this case is larger than most. Sioux Falls really got in over it's head; Uncle Pete may have just done them a huge favor. Hopefully they do a better job at due-dilligence from this point forward.

Yikes![:0] Sioux Falls and Sioux City are 2 different places, 90miles apart![xx(]

[Anonymous]

QUOTE: Originally posted by falconer

Oil should have run out already. The world's oil has been pumped for over 100 years. There might be more going on beneath the surface of the earth than we know.

The real fuel solution is to combine photosythesis and photovoltaic panels to break apart and bond chemicals for energy storage and energy production.

Andrew F.

Andrew -

Whew. Geologists have a pretty good idea what is going on beneath the surface actually. Fields are running reasonable close to projected reserves. Notice the fact that there are many older fields that have closed or are only pumping a fraction of what they were in the past?? Look at Southern California, many parts of Texas and elsewhere. We are pumping from different fields now...

LC

[mudchicken]

LC: Couldn't agree with you more.

And in this case, to the City of Sioux City, IA:
(1) Mayor Berenstein - Start looking for neweconomic development people. These people are deaf, dumb & blind.
(2) Don Willoughby: Find a new line of work in a different profession.
(3) Baard - Why did you switch developers?
(4) Hire a consulting engineer that can do more than highway. I have got to wonder if the rubes in the "smoke filled room" brigade (Baard/City/Siouxland Initiative) failed to even hire an engineering consultant to look at feasability. Sounds more like a bunch of dumb real estate agents and 5 Watt politicians on a street corner trying to hook the next industry that wanders through.

FM : Financial responsibility is nowhere in your vocabulary - is it? It would appear that unless a shipper/industry gets something on the dole [ie-someone else's hard earned capital], it's a bad deal. Dream on. (ps...what you are advocating prompted the Elkins Act 90+ years ago. Bad business practice then, bad practice now.) Railroads do NOT build on speculation anymore, carloadings pay for it. (as in "Show me the money")

I stand on my original comment. I have seen far too many assumptions and blunders coming from industry planners, economic development groups, real estate agents/morons, developers, politicians and the like. Some things never change, just this case is larger than most. Sioux Falls really got in over it's head; Uncle Pete may have just done them a huge favor. Hopefully they do a better job at due-dilligence from this point forward.

[beaulieu]

QUOTE: Originally posted by jakebud

TomDiehl and Farmer 03

You guys seem to pay no attention to the thought that in order make ethanol, you have to plow a field, fertilize, plant, harvest, and move the corn to an ethanol plant. Best as I can tell, all of those processes use diesel fuel in trucks and tractors, and that comes from petroleum. Why don't you take a look at how much fuel is used to produce ethanol before its less than wonderous virtues are touted.

SPIKE

How much diesel did the tanker use to haul the oil from the Middle East, don' t forget to figure the empty return. What about the diesel used to power the drill rig etc. How much energy is used in the cracking process. Also in figuring Ethanol don't forget to subtract for the DDG produced since you would have to produce that much corn anyway for animal feed. How the firgures add up depends on what you want to prove.

[rrandb]

QUOTE: Originally posted by jakebud

TomDiehl and Farmer 03

You guys seem to pay no attention to the thought that in order make ethanol, you have to plow a field, fertilize, plant, harvest, and move the corn to an ethanol plant. Best as I can tell, all of those processes use diesel fuel in trucks and tractors, and that comes from petroleum. Why don't you take a look at how much fuel is used to produce ethanol before its less than wonderous virtues are touted.

SPIKE

Yes and each and every one of those dollars supports our domestic economy. Brazil was able to convert there cars to 100% alcohol based fuels. They are no longer bound to the Middle East for fuel. If we could retain all those dollars domestically it would make a huge difference in our economy. Who would you rather see get the money? Farmers or Oil companies?[?] As always ENJOY

[Anonymous]

Oil should have run out already. The world's oil has been pumped for over 100 years. There might be more going on beneath the surface of the earth than we know.

The real fuel solution is to combine photosythesis and photovoltaic panels to break apart and bond chemicals for energy storage and energy production.

Andrew F.

[jakebud]

TomDiehl and Farmer 03

You guys seem to pay no attention to the thought that in order make ethanol, you have to plow a field, fertilize, plant, harvest, and move the corn to an ethanol plant. Best as I can tell, all of those processes use diesel fuel in trucks and tractors, and that comes from petroleum. Why don't you take a look at how much fuel is used to produce ethanol before its less than wonderous virtues are touted.

SPIKE

[Anonymous]

QUOTE: Originally posted by chad thomas

QUOTE: Originally posted by James_the_Mad

I'm amused that 2-3 mil for the siding would derail a $140 mil project. That adds what, 2% to the overall cost of the project? Was their guesstimated profit margin that thin to start with?

I was wondering the same thing. Thats like saying you can't afford to build your new $300,000 home because the $3,000 cost of the driveway. Lame. I think they are just playing games hopeing to have someone else pay the tab.

UP can give this customer the truth serum by simply requiring the Ethanol folks to enter into a written guarantee of carloadings adequate to allow UP a return on their investment. If they are willing to pay a per car surcharge to make the rehab worth UPs while I'm sure UP would do it. If not, they are simply trying to force someone else to pay their way, a common tactic of rail customers too used to transportation by highway...

LC

[Anonymous]

QUOTE: Ethanol:low octane+lousy milage.No thank you.

A Chevy 400 small-block V8 can't ever get good milage when the carberator is set so it turns out 300+HP[:D][:D][:D]

[TomDiehl]

But is the ethanol planned to be used as a gasoline additive, as it was in the 70's, or a gasoline substitute?

[Anonymous]

QUOTE: Originally posted by espeefoamer

Ethanol:low octane+lousy milage.No thank you.[:(!]

Ethanol or more specificly E-85 at the pump is 105 octane. The reason why you get 20-25% less mileage is because ethanol burns at a lower BTU than regular gasoline, it takes more to get the same heat. Personally I don't see a *** thing wrong with the 25% mileage drop. Ethanol is a renewable fuel, gas/oil is not. I still don't see why you people have a problem with it. You **** and moan and fly off the handle about terrorists learning how to shut down a locomotive, yet you still pull up to the pump and burn regular gas. WTF? If you have a flex-fuel vehicle, I'd suggest you use more E-85 and keep your money domestic.

[chad thomas]

QUOTE: Originally posted by James_the_Mad

I'm amused that 2-3 mil for the siding would derail a $140 mil project. That adds what, 2% to the overall cost of the project? Was their guesstimated profit margin that thin to start with?

I was wondering the same thing. Thats like saying you can't afford to build your new $300,000 home because the $3,000 cost of the driveway. Lame. I think they are just playing games hopeing to have someone else pay the tab.

[espeefoamer]

Ethanol:low octane+lousy milage.No thank you.[:(!]

[Anonymous]

I don't see why some of you are against ethanol. Because that oil deep down in the earth WILL run out someday. There's no question there. Now we've found a new way to make fuel and you're all complaining. I know, not all vehicles run on e-hol. There was a study and only 20% of cars in IA can run on the new 85% e-hol (or whatever it is). But I think e-hol is a pretty good invention. They just need to try to make a better blend so cars run better on it. For example- I can't run e-hol in a lawn mower. It doesn't run well. But these lawn mowers are 20+ years old & that's why. If i put e-hol in a new mower; it might run fine.

[Murphy Siding]

QUOTE: Originally posted by futuremodal

So, a US railroad company craps out on capacity enhancement for a US production facility? Is anyone really suprised? In the meantime, UP is spending how much to further upgrade it's import intermodal corridor?

I suspect that if it had been an Asian company that had proposed this plant (all other items being equal), UP would be falling all over itself to provide the necessary track improvements.

And yes, ethanol is a complete waste of resources. Yet the same would probably be happening if the proposal had been for a new coal fired power plant.

They got the Ciity to agree to give them the land. They probably also were promised a property tax *enhancement* package to help lure them to Sioux City. It's not unthinkable for them to expect the railroad to *give* them a rail siding, when you look at how these type projects are financed. They asked UP for a freebie, UP said no. It's time to scrape up more money, or move on. Who do you suppose they were going to hit up for a barge unloading facility? My guess would be Uncle Sam?

[CSSHEGEWISCH]

QUOTE: Originally posted by futuremodal

So, a US railroad company craps out on capacity enhancement for a US production facility? Is anyone really suprised? In the meantime, UP is spending how much to further upgrade it's import intermodal corridor?

I suspect that if it had been an Asian company that had proposed this plant (all other items being equal), UP would be falling all over itself to provide the necessary track improvements.

And yes, ethanol is a complete waste of resources. Yet the same would probably be happening if the proposal had been for a new coal fired power plant.

I detect more than a little bit of xenophobia on the part of FM. Let's see, the diesel engine was designed by a German, Hermann Lemp was Swiss, etc., etc., etc.

[Anonymous]

Then why is the Government trying so hard to push harder to add more ethonol plants.
Limitedclear,I was not Forming an opion on stUPid.

[Anonymous]

Darnit and I was hoping the city would pay to concrete the driveway from the street to my house, because they should be glad I built my house in their town. [banghead]

[Anonymous]

QUOTE: Originally posted by futuremodal

So, a US railroad company craps out on capacity enhancement for a US production facility? Is anyone really suprised? In the meantime, UP is spending how much to further upgrade it's import intermodal corridor?

I suspect that if it had been an Asian company that had proposed this plant (all other items being equal), UP would be falling all over itself to provide the necessary track improvements.

And yes, ethanol is a complete waste of resources. Yet the same would probably be happening if the proposal had been for a new coal fired power plant.

Everybody always seems to think the RR has an obligation to connect them to rail. Ethanol requires rail as it cannot move by pipeline. Sounds like these guys just figured they could lever UP into spending the cash on upgrading their spur. I'm amazed that these folks didn't factor the cost of the spur into their calculations. I'm actually sure that they did. They were merely hoping that they could get either the UP or localities to pay for it. Look at how Toyota got the State of Texas to pay for a long spur to bring rail to their new truck plant near Austin.

They'll just have to find a better location and try bringing the RR into it this time. I wonder if there is a switching contractor or small short line opportunity in all this...

Too far away for me to chase it, but perhaps there are those in the midwest with the time and inclination...

LC

[Anonymous]

I'm amused that 2-3 mil for the siding would derail a $140 mil project. That adds what, 2% to the overall cost of the project? Was their guesstimated profit margin that thin to start with?

[Anonymous]

So, a US railroad company craps out on capacity enhancement for a US production facility? Is anyone really suprised? In the meantime, UP is spending how much to further upgrade it's import intermodal corridor?

I suspect that if it had been an Asian company that had proposed this plant (all other items being equal), UP would be falling all over itself to provide the necessary track improvements.

And yes, ethanol is a complete waste of resources. Yet the same would probably be happening if the proposal had been for a new coal fired power plant.

[Anonymous]

QUOTE: Originally posted by BNSFrailfan

Way to go STUPID UP!
http://www.omaha.com/index.php?u_pg=46&u_sid=2136526

Since your link doesn't get one to the full text, perhaps you should read it BEFORE forming an opinion...

Railroad Dispute Halts Ethanol Plant

SIOUX CITY, Iowa (AP) - Plans to build a $140 million ethanol plant are
on hold after Union Pacific Railroad said it would not upgrade a rail
spur needed to haul large amounts of corn to the plant.

Officials from the city and Baard Renewables, based in Washington
State, learned in a meeting last week with Union Pacific representatives
that the rail spur needed improvements to handle increased traffic.

"Union Pacific said they were not going to spend the $2 million to $3
million necessary to upgrade," said Don Willoughby, Sioux City's
business development coordinator.

Baard officials then told the city they no longer wanted the site if
grain can't be delivered to the plant by rail. The company also planned
to move grain by barge on the Missouri River.

Willoughby said Baard had been talking to Omaha-based Union Pacific
throughout the planning stages for the ethanol plant, but those
discussions took place with the railroad's rate division and not its industrial
development division.

"Everybody's disappointed on this," said Craig Conner, Baard's vice
president of finance. "Information like this coming up this far into the
process usually doesn't happen. That's where our due diligence fell
down."

Baard switched developers midway through the project, he said, which
resulted in the rail spur issue not being thoroughly checked.

"That probably was a piece of information that didn't get handled real
well," Conner said.

Baard is still interested in building an ethanol plant in Sioux City,
he said.

Mayor Craig Berenstein said officials will continue to work with the
company to find an appropriate location.

"There was a lot of hard work we put into this. We're not going to let
it go. It's still viable," Berenstein said.

Baard announced plans in November for a Sioux City ethanol plant that
eventually would produce as much as 100 million gallons of the fuel
additive.

The city planned to buy 60 acres needed for the project at $10,000 an
acre and sell it to Baard for $1. In return, the company agreed to a
minimum assessed valuation and the creation of about 50 new jobs.

Baard Renewables is the renewable fuels division of Baard Energy, a
Vancouver, Wash.-based company.


LC

[TomDiehl]

Jake, a little history for you. Ethanol was used as a gasoline additive long before lead was added to boost the octane. A lot safer too. The biggest problem with changing to it in an engine that was run on regular gasoline is that the ethanol acts as a cleaner and removes the gunk from the fuel system. This is the crud that caused the problem back in the 70's with gasohol (sp?).

And another big difference, the source is domestic, not in the Middle East making terrorists rich.