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Sorry to anyone in Atlanta who could've used this information today, but I just noticed it now: a half-dozen fuel stations are offering E85 for $1.85 a gallon tomorrow. The low price - subsidized/sponsored by the Ethanol Promotion and Information Council (EPIC), Clean FUEL Distribution, Indore Oil and BP - also happened today at six other stations. The deal is here because these 12 shops are all new ethanol retailers (Wonder how the post office feels about this?), and EPIC and the other promoters want people to fill up their flex-fuel vehicles with the biofuel. Speaking of which, only vehicles can be tanked during the two-hour sale, not portable gas carriers. If you're interested in buying the fuel, you can click on the image above to read the list of stations better or visit the EPIC website for more information.

[Source: EPIC]

First, some history:

• March 2008: $1.85 a gallon in Iowa.
• October 2007: $0.00 a gallon in Wisconsin.
• August 2007: $1.85 a gallon in South Dakota.
• May 2007: $1.85 a gallon in Iowa.

These are just some of the recent ethanol (E85) promotions that companies like GM and groups like the American Lung Association have offered. Tomorrow there's another event, this time at a Kum & Go station in Norwalk, Iowa. For four hours (between 10 am and 2 pm) E85 is on offer for $1.60 a gallon. Full details after the jump.

Say what you will about corn ethanol (and we do, don't worry), the food for fuel debate, and the high cost of gas for most of the country, for at least a few people, filling up the flexfuel car won't hurt quite as much tomorrow as it usually does. Take it for what it's worth.

Photo by Hummanna. Licensed under Creative Commons license 2.0.

Brazilian president Luis Inazio Lula da Silva is eager to shoot down anyone who says ethanol raises the price of food. There are plenty of people with their own ideas about that. But what about the impact ethanol has on oil prices? If we believe the Renewable Fuels Association, then ethanol plays a solid role in keeping oil prices about 15 percent lower than they might otherwise be (so, around $130+ per barrel if ethanol weren't in the picture). The reason for this is because burning ethanol reduces the world's demand for oil, and decreased demand lowers prices. The 15 percent figure comes from Merrill Lynch analyst Francisco Blanch, who spoke to the Wall Street Journal. While that may sound good at first blush, the reporter on the WSJ piece, Patrick Barta, begins his article this way: "The world's economy is acquiring a new energy addiction: biofuels." Anyone else hear warning bells?

[Source: Domestic Fuel / WSJ]

While we spent a lot of late 2007 talking about the very real ethanol glut that was happening in America, the good news for people who have a lot invested in the biofuel (farmers, for one) is that prices have been on the upswing since mid-November. According to an article in the Wichita Eagle, the rebound is taking the form of a 35-cent-per gallon increase and is "within 10 cents of the wholesale price of unleaded gasoline." There is still plenty of ethanol available, but with fewer plants being built (and those that are are not being completed on schedule), prices are increasing. Once the distribution system is improved - and more people realize they can fill their flexfuel cars with ethanol - the glut will likely disappear and the supply and demand will be back in balance.

[Source: Kansas.com via Domestic Fuel]

While the auto industry reactions were pretty much universally positive when the new energy bill passed earlier this month, Citigroup is ready to throw a bit of water on the parade. The banking giant is predicting that the new legislation will make ethanol even more expensive in 2008. According to an article on Purchasing, Citigroup analysts wrote in a report that "We firmly believe the new energy bill will serve as a significant catalyst to the ethanol industry, as the higher mandated ethanol levels stipulated by the new renewable fuel standard should serve to bring ethanol supply and demand back into balance, thereby strengthening ethanol's pricing fundamentals." Does this mean that the glut will be over soon? Will promises of higher prices drive even more ethanol producers into the business? What about corn prices? Or beer?

[Source: Tom Stundza / Purchasing.com]

Here's the deal: ethanol is not the only reason that the average price of a bowl of cereal and milk is moving from 44 cents last year to 49 cents this year to an expected 56 cents next year. But, as AP writer Lauren Villagran explains, a weak U.S. dollar, high fuel prices and China's growing economy don't hide the fact that the rapid increase in corn ethanol production is affecting people at the grocery store. And so, the "worst bout of food inflation since 1990" does have something to do with all those millions of gallons of etahnol. And are you ready for this tidbit: "China will import almost 50 percent of the world's oilseeds within a decade, becoming the world's largest importer, according to estimates from the Organization for Economic Cooperation and Development." That will affect food and biofuels, no doubt. The upshot of Villagran's article is that these prices are part of a complex, global issue. Will it follow that more people will demand high-efficiency, low-liquid-fuel-using cars pronto? Or will Americans just buy steak less often?

[Source: AP]

What's better, high or low ethanol prices? It all depends on whom you're asking. For mega-bank Citigroup, higher prices mean things are "improving."

Certainly this isn't true if you're the end consumer, but for the faceless economists, higher prices mean stronger stocks. While Citigroup, according to Reuters, sees weak ethanol prices continuing for the next six months or so, things will "improve" in the first quarter of 2008. The improvement will come about once increased ethanol production capacity hits its peak and then starts to go down next year.

I suppose this means ethanol's current "39 cent a gallon discount to wholesale gasoline" will be tightened, and ethanol prices will go up at the pump. It seems to me that ethanol producers certainly have an interest in pushing the price of their product as high as they can, as long as they keep it cheaper than gasoline (if for no other reason than ethanol's got less oomph in the tank, and if you're going to be getting fewer mphs, you certainly don't want to pay more for the privilege). That seems like the businessman's way of thinking, but I'm not a businessman, so I'll defer to those of you who are, in the comments.

[Source: Reuters]

Good news for Brazilians: the prices for ethanol has dropped 38 percent because of an increase in sugarcane production. Prices will continue its decrease, according to Júlio Maria Borges, an analyst at JOB Consultaría, even when the harvest finishes.

There are two determining factors for this decrease. One is the price of alcohol, which has dropped 18 percent. The second factor is the decrease in ethanol exportations. Despite President Lula da Silva's efforts to export Brazil's biofuel of choice, UNICA (the Brazilian association of sugarcane producers) expects to export just 3,100 million liters this year, whereas last year the number was 3,600 million. The US, which was one of the main customers for Brazilian ethanol, has reduced imports because of the increase in domestic production and the reduction of prices.

Related:

• Philadelphia says biofuels are good for national security and the state's economy
• Petrobras and Statoil join forces to produce biofuels
• Brazil forecasts record sugarcane and ethanol production

[Source: Instituto Español de Comercio Exterior via Econoticias]