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Old 01-02-2015, 09:51 AM   #21 (permalink)
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The real fishy smelling thing in that picture Frank posted is, the price of diesel...





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Old 01-02-2015, 10:09 AM   #22 (permalink)
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Diesel here is $2.99 a gallon. Regular was $2.099.

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Old 01-02-2015, 10:18 AM   #23 (permalink)
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Diesel is $2.99 and gasoline $1.97 in my area?
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Old 01-02-2015, 11:50 AM   #24 (permalink)
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Quote:
Originally Posted by redpoint5 View Post
How does lower fossil fuel prices affect ethanol prices so drastically? Shouldn't the cost of growing the grain and distilling be less dependent on oil prices? Something smells fishy here.
Ethanol is still mandated in fuel, there are plenty of uses for ethanol bi-products, and new uses for ethanol are being realized (bought a can of Lysol and noticed its 58% ethanol, not alcohol or isopropyl, ethanol.) Ethanol producers are profitable if they are large enough to produce at ideal quantities to incure economies of scale, but a lot of ethanol, e85, is sold at a loss as a consequence.

Im not an expert on the matter, but that is generally what is happening.
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Old 01-02-2015, 12:10 PM   #25 (permalink)
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One reason gas was made cheap, was to spur the economy. Cheaper gas gets people to open their wallets to buy things. However, there is little thought or concern given to the fuel surcharge built into every single thing one buys and or consumes.
The oil companies know this and in that way are easily able to keep the profit margin high for diesel.

It wasn't that long ago that diesel was half of what gas cost.

The process to produce diesel hasn't changed since then.

Fishy really isn't the right word.

Greedy is...



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Old 01-02-2015, 12:41 PM   #26 (permalink)
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Why diesel costs more than gas: https://www.google.com/webhp?sourcei...han%20gasoline
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Old 01-02-2015, 03:06 PM   #27 (permalink)
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Greed alone doesn't explain why ethanol was able to come down in price and diesel stayed high.

As a greedy (self-interest motivated) person, I wouldn't sell the ethanol I produced if I couldn't turn a profit. That would then drive the price of ethanol higher. On the other hand, if I could sell E85 for $1/gallon and make a profit while gasoline prices are low, then surely I could make a killing when gasoline prices are high without having to increase my prices by very much.

There should be very little linked between the price of E85 and gasoline. The fixed costs of growing corn and distilling ethanol won't vary by much with regard to fuel prices.

The explanation from the EIA for diesel fuel prices being more than gasoline doesn't make any sense either. It says refining capacity limits production, but diesel has been more expensive since 2004; there has been 11 years to ramp up refining capacity in response to demand. It also says global demand for diesel has risen, however diesel is refined from a barrel of crude oil, which has recently had a large drop in price. This should drive diesel prices lower along with all other distillates. Finally, the EIA says diesel is taxed at $0.06 more than gasoline and has extra expense in sulfur removal. That extra $0.10 in cost over gasoline doesn't explain why diesel is $1.00 more expensive.
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Old 01-02-2015, 04:29 PM   #28 (permalink)
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I think the wanting higher fuel prices to possibly slightly reduced the number of lifted pickups on the road is almost a silly argument. Many trucks, like the one pictured, a CTD, don't take much of a hit in FE with the lift and tires. Even if it did, do the people who have $10,000 to customize a $50,000 truck really care if gas is $2 or $4/gallon? How many additional accidents are there really that could be directly attributed to lift kits and big tires? I'm sure a few but really worth saddling the working middle class with an extra burden just to prevent a handful of deaths. If "even one life could be saved" is your stand, then aren't the additional fatalities from higher cafe standards not worth it?
how about just a simple law on bumper heights and then be happy about under $2 gas.
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Old 01-02-2015, 05:08 PM   #29 (permalink)
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Interesting point about ethanol. Farmers are known to hold or sit on crops to get more money. Im guessing the ethanol is not grain based or the grain used cant be used for anything else?
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Old 01-02-2015, 06:23 PM   #30 (permalink)
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Diesel is more because the stuff they remove from diesel to get to unleaded is valuable in its own right. Before that was more of a byproduct. Refining diesel is like removing blueberries from muffins. Muffins are valuable without blueberries and blueberries are valuable by themselves but blueberry muffins are the most valuable of all.

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