Stated Income Refinance

Jan 31, 2012



stated income refinance

Ethanol fuel in the United States – Double Flanged Butterfly Valve – Flanged Ball Valve   by hi joiney

History of ethanol in the US Typical label at the gas pumps warning drivers of ethanol content up to 10 used as oxygenate additive instead of MTBE Miami Florida In 1826 Samuel Morey experimented with a psychoactive internal combustion chemical that used ethanol combined with turpentine and ambient air then vaporized as fuel At the time his discovery was overlooked mostly due to the success of steam power And while ethanol was known of for decades it received little attention as a fuel until 1860 when Nicholas Otto began experimenting with internal combustion engines In 1859 oil was found in Pennsylvania which provided a new supply of fuel for the United States A popular fuel in the U S before petroleum was a blend of alcohol and turpentine called camphene also known as burning fluid With the discovery of a ready supply of oil kerosene s popularity grew in 1896 Henry Ford designed his first car the Quadricycle to run on pure ethanol Then in 1908 he produced the famous Ford Model T capable of running on gasoline ethanol or a combination of both Ford continued to advocate for ethanol as fuel even during the prohibition but cheaper oil caused gasoline to prevail Gasoline containing up to 10 ethanol has been in increasing use in the United States since the late 1970s The demand for ethanol fuel produced from field corn was spured by the discovery that methyl tertiary butyl ether MTBE was contaminating groundwater MTBE use as a oxygenate additive was widespread due to mandates of the Clean Air Act amendments of 1992 to reduce carbon monoxide emissions As a result MTBE use in gasoline was banned in almost 20 states by 2006 There was also concern that widespread and costly litigation might be taken against the U S gasoline suppliers and a 2005 decision refusing legal protection for MTBE opened a new market for ethanol fuel the primary substitute for MTBE At a time when corn prices were around US 2 a bushel corn growers recognized the potential of this new market and delivered accordingly This demand shift took place at a time when oil prices were already significantly rising By 2006 about 50 percent of the gasoline used in the U S and more than 85 percent of Hawaii gasoline contains ethanol at different proportions Current trends U S fuel ethanol production and imports 2001 2009 Millions of U S liquid gallons Year Production Imports Demand 2001 1 770 n a n a 2002 2 130 46 2 085 2003 2 800 61 2 900 2004 3 400 161 3 530 2005 3 904 135 4 049 2006 4 855 653 5 377 2007 6 500 450 6 847 2008 9 000 556 9 637 2009 10 617 211 10 768 Note Demand figures includes stocks change and small exports in 2005 The world s top ethanol fuel producers in 2008 were the United States with 9 000 billion U S liquid gallons bg and Brazil 6 47 bg accounting for 89 percent of world production of 17 33 billion US gallons 65 6 million liters By early 2009 the U S ethanol production industry consisted of 170 plants operating in 26 states The 2008 production from these plants was 38 percent higher over the previous year and growth has been so steep that the U S surpassed Brazil as the worlds largest ethanol producer since 2005 Dozens more plants are under development and due to come on line in 2008 and 2009 increasing U S production capacity to nearly 12 billion gallons Most of the ethanol consumed in the US is in the form of low blends with gasoline up to 10 Shown a fuel pump in Maryland selling mandatory E10 Typical labeling used in the US to remind drivers of the vehicle s E85 capabilities Top a small sticker in the back of the fuel filler door Below left the bright yellow gas cap now used in newer models Below right the E85 Flexfuel badgind used in newer GM models However since late 2008 and early 2009 the industry has been under financial stress due to the effects of the economic crisis of 2008 as motorists are driving less gasoline prices have dropped sharply and corn prices have been fluctuating and remaining relatively high There is also excess production capacity and less bank financing available As a result some plants are working below capacity several firms have closed some of their plants while others have laid off staff some firms filed for bankruptcy protection including former industry leader VeraSun Energy some new plants construction have been suspended and several oil companies have been buying ethanol plant at discounted prices The Energy Information Administration has raised concerns that the ethanol industry will not meet the targets set by Congress in 2007 Most cars on the road today in the U S can run on blends of up to 10 ethanol and motor vehicle manufacturers already produce vehicles designed to run on much higher ethanol blends In 2007 Portland Oregon recently became the first city in the United States to require all gasoline sold within city limits to contain at least 10 ethanol As of January 2008 three states Missouri Minnesota and Hawaii require ethanol to be blended with gasoline motor fuel These states particularly Minnesota have had substantially more success in promoting ethanol usage and have accumulated substantial environmental and economic benefits as a result Florida made mandatory such blends by the end of 2010 Many cities are also required to use an ethanol blend due to non attainment of federal air quality goals E85 fuel dispenser at a regular gasoline station Washington D C E85Flexfuel Chevrolet Impala LT 2009 E85 Flexfuel Ford E 250 Ford Chrysler and GM are among the automobile companies that sell flexible fuel vehicles that can run gasoline and ethanol blends ranging from pure gasoline up to 85 ethanol E85 and by 2008 almost any type of automobile and light duty vehicles is available in the market with the flex fuel option including sedans vans SUVs and pick up trucks By mid 2008 there were more than seven million E85 compatible vehicles on U S roads though actual used of E85 fuel is limited not only because the ethanol fueling infrastructures is limited but also as found by a 2005 survey 68 of American flex fuel car owners were not aware they owned an E85 flex This is due to the fact that the exterior of flex and non flex vehicles look exactly the same there is no sale price difference between them the lack of consumer s awareness about E85s and also the decision of American automakers of not putting any kind of exterior labeling so buyers can be aware they are getting an E85 vehicle In contrast all Brazilian automakers clearly mark FFVs with badging or a high quality sticker in the exterior body with a text that is some variant of the word Flex As of 2007 many new FFV models in the US now feature a yellow cap to close the fueling line to remind drivers of the E85 capabilities and GM is also using badging with the text Flexfuel E85 Ethanol to clearly mark the car as an E85 FFV E 85 flex fuel vehicles are becoming increasingly common in the Midwest where corn is a major crop and is the primary feedstock for ethanol fuel production A major restriction hampering sales of E85 flex vehicles or fueling with E85 is the limited infrastructure available to sell E85 to the public as by July 2008 there were only 1 706 gasoline filling stations selling E85 to the public in the entire US with a great concentration of E85 stations in the Corn Belt states lead by Minnesota with 353 stations more than any other state followed by Illinois with 181 and Wisconsin with 114 About another 200 stations that dispense ethanol are restricted to local city state and federal government vehicles without access to the general public The Energy Information Administration EIA predicts in its Annual Energy Outlook 2007 that ethanol consumption will reach 11 2 billion gallons by 2012 outstripping the 7 5 billion gallons required in the Renewable Fuel Standard that was enacted as part of the Energy Policy Act of 2005 Expanding ethanol and biodiesel industries provide jobs in plant construction operations and maintenance mostly in rural communities According to the Renewable Fuels Association the ethanol industry created almost 154 000 U S jobs in 2005 alone boosting household income by 5 7 billion It also contributed about 3 5 billion in tax revenues at the local state and federal levels Ethanol has less energy than an equivalent volume of gasoline but can be produced from domestic renewable sources such as corn sugar beets and sugar cane There are also industrial processes which use ethanol as an intermediate or final product mouthwash for example Companies that serve industrial users of ethanol have been observing the green movement and have found ways to collect and reprocess ethanol For instance Veolia an environmental services company has been a pioneer in the field of gathering waste ethanol and producing it from other resources This is a new alternative to the low yielding corn production Waste ethanol is cleaned up through distillation which increases the alcohol content to match ethanol produced from corn Ethanol is also produced from off specification alcoholic beverages and through the fermentation process of other off specification beverages and products such as out of date cola syrup The resulting liquids are processed through the fermentation and distillation equipment All the packaging plastic aluminum steel cardboard and wood pallets is recycled The final ethanol product is sold back in to the ethanol market where much of it is used as fuel In the United States the newest ethanol recovery plant opened in Medina Ohio in July 2008 by Veolia Environmental Services confirming the green movement in alternative fuel production Reduced petroleum imports and costs New energy corporation s 102 mmgy ethanol plant in South Bend Indiana One rationale given for extensive ethanol production in the U S is its benefit to energy security by shifting the need for some foreign produced oil to domestically produced energy sources Production of ethanol requires significant energy but current U S production derives most of that energy from coal natural gas and other sources rather than oil Because 66 of oil consumed in the U S is imported compared to a net surplus of coal and just 16 of natural gas 2006 figures the displacement of oil based fuels to ethanol produces a net shift from foreign to domestic U S energy sources According to a 2008 analysis by Iowa State University the growth in US ethanol production has caused retail gasoline prices to be US 0 29 to US 0 40 per gallon lower than would otherwise have been the case Cellulosic ethanol In his State of the Union Address on January 31 2006 President George W Bush stated e ll also fund additional research in cutting edge methods of producing ethanol not just from corn but from wood chips and stalks or switchgrass Our goal is to make this new kind of ethanol practical and competitive within six years The U S Department of Energy released a report on July 7 2006 with an ambitious new research agenda for the development of cellulosic ethanol as an alternative to gasoline The 200 page scientific roadmap cites recent advances in biotechnology that have made cost effective production of ethanol from cellulose or inedible plant fiber an attainable goal with federal loan guarantees for new cellulosic biorefineries The report outlines a detailed research plan for developing new technologies to transform cellulosic ethanol a renewable cleaner burning and carbon neutral alternative to gasoline into an economically viable transportation fuel The Department of Energy has invested in research on enzymatic thermochemical acid hydrolysis hybrid hydrolysis enzymatic and a variety of other approaches toward achieving success in discovering an efficient and low cost method of converting cellulose to ethanol President Bush s 2007 budget earmarked 150 million for the research effort more than double the 2006 budget in favor of the cellulosic lobby Taxpayers and consumers are already shouldering part of the cost each gallon of ethanol sold is subsidized by a 51 cent gallon federal tax credit paid to U S producers These subsidies along with state incentive programs cost the nation over 2 billion a year leading legislators to pledge to invest in cellulosic ethanol Another dampening factor is the short term loss of income to American refiners of crude oil The U S market is especially lucrative sometimes earning its refiners 30 or more on every barrel of crude oil they refine Exxon Mobil Corp earned 1 3 billion in its refining arm in the second quarter up 11 from a year before The expectation over the long run is that the U S economy would more than earn its share back if our primary source of energy were manufactured and processed in the United States but individual companies could be adversely affected Sugar based ethanol United States fuel ethanol imports by country 2002 2007 Millions of U S liquid gallons Country 2007 2006 2005 2004 2003 Brazil 188 8 433 7 31 2 90 3 0 Jamaica 75 2 66 8 36 3 36 6 39 3 El Salvador 73 3 38 5 23 7 5 7 6 9 Trinidad and Tobago 42 7 24 8 10 0 0 0 Costa Rica 39 3 35 9 33 4 25 4 14 7 Technologically the process of producing ethanol from sugar is simpler than converting corn into ethanol Converting corn into ethanol requires additional cooking and the application of enzymes whereas the conversion of sugar requires only a yeast fermentation process The energy requirement for converting sugar into ethanol is about half that for corn With sugar cane there is more than enough energy to do the conversion with energy left over A 2006 USDA report found that at the current market prices for ethanol converting sugarcane sugar beets and molasses to ethanol would be profitable Research is taking place to improve the productivity of sugarcane ethanol production by breeding new varieties adapted to the US soil and weather conditions as well as to take advantage of cellulosic ethanol

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