Pumping Ethanol

Although some might think that high gas prices spell money for gas stations, one casualty of the high price of oil has been independent gas station owners.  While independent gas station owners are generally able to buy fuel at low prices on the open market, lower than branded gas stations, in recent months they have been consistently forced to buy fuel at higher prices, causing them to lose money or even close in some cases.

From the San Diego Union-Tribune, June 24 2008:


Opportunity #67 in “75 Green Businesses” is to establish alternative fueling stations.  If fueling our cars is going to transition away from oil, they need something to transition to.  Millions of flex-fuel cars have been sold in the US that can run on ethanol, but most of them don’t; their owners power them with gasoline because ethanol is not readily available where they live or they don’t use it. 

Pearson Fuels in San Diego (www.pearsonfuels.com) provides a variety of alternative automobile fuels, including ethanol, biodiesel, propane and natural gas.  Mike Lewis, the co-owner of Pearson Fuels, reports that ethanol sales are up, and that ethanol has provided a better margin than gas for station owners in this difficult time period.  “E85 sales are at record levels due to the price differential between E85 and gasoline,” Lewis says.  Pearson Fuels is helping other stations to go through the California permitting process for pumping ethanol, and he has also seen an increase in the number of station owners who want to work with them to start pumping ethanol themselves.

And where is the price of gasoline headed?  Lewis has a pretty good perspective on this question:

“The price will go up and down and I have no idea, nor does anyone else, what the price will do next week, month or year. However, before all the hairs on my 42 year old head are gray, $10.00 per gallon. The bottom line is that we know what is going to happen to demand over the next 20 years and we know that oil is a finite resource. It is really pretty straightforward to figure out what those two things interacting will do to the price.” 

In the short term, no expert can say what is going to happen.  In the long run though, it is inevitable that oil, gas, and diesel will get more expensive. 

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