Ethanol gets a boost as Katrina drives up gas prices

On The Farm

September 11, 2005|By Ted Shelsby | Ted Shelsby,SUN STAFF

WHILE MOTORISTS in the Baltimore area were grumbling as they pumped $3.49-a-gallon gasoline into their cars last week, Lynne Hoot pulled into an Annapolis-area Citgo station and paid $2.24 a gallon to fill the tank of her Dodge Caravan.

The big difference -- other than price -- was that Hoot pumped E85, a farm product that is not unlike the corn liquor produced by moonshiners during Prohibition.

E85 is a blend of 85 percent alcohol made from corn -- commonly called ethanol -- and 10 percent gasoline.

Only three places in Maryland sell E85 to the public. While it might be an exaggeration to say there was a run on the corn-based alternative fuel last week, it was selling like never before.

"I would normally sell 20 gallons a day," said Wan Kang, owner of the Citgo station on West Street, just outside Annapolis where Hoot filled her tank. "Now I'm selling 300 to 400 gallons a day."

That was before customers pumped his 10,000-gallon E85 tank dry Thursday morning.

"I tried to order more, but the company is also out," Kang said. "Maybe I get more next week but not guaranteed."

Kang said he kept the price at $2.24 even though gasoline at his station and other stations in the area was selling for $3.39 and more.

He said he gets more than 20 calls a day from people looking for E85.

Closer to Baltimore, a Chevron station near Fort Meade was selling E85 for $2.99 a gallon late last week. The price was up from $2.67 the previous week.

"Everything goes up in price as the demand increases," said John Bevan, a business partner at the station.

In the past, Bevan said, 99 percent of the station's E85 customers were drivers of government vehicles. Under terms of the U.S. Energy Policy Act of 1992, three-quarters of the cars and light trucks in the federal and state government fleets were built to run on alternative fuels, such as ethanol.

Bevan said the station's E85 sales doubled last week.

Hoot is executive director of the Annapolis-based Maryland Grain Producers Association, a farming organization seeking to open Maryland's first ethanol production plant. She said that while not all vehicles can burn E85, about a million cars and light trucks on the road can.

The association was instrumental in the opening of the three E85 stations in Maryland that serve the public. In addition to the Fort Meade and Annapolis stations, a third is in Rockville.

Maryland grain farmers added $50,000 to a $330,000 grant from the U.S. Department of Energy and used the money to pay for the tanks, pumps and other equipment at the stations supplying E85. The first station -- the Fort Meade location -- opened in November 2001.

"Despite paying the cost, we had a hard time getting stations interested in the product," said Hoot.

She said a fourth station, to be located near the state office complex on West Preston Street in Baltimore, is scheduled to open in May.

State Agriculture Secretary Lewis R. Riley said the only possible silver lining from Hurricane Katrina and the sharp jump in gas prices might be "that it gives a boost to our efforts to open an ethanol plant."

The grain producers' association has also been leading efforts to build an ethanol plant in the state that would convert grain into a gasoline additive or fuel extender.

Hoot sees the major market for alternative fuels made from corn (or barley in the case of the planned Maryland plant) not so much in E85, but a product made up of 90 percent gasoline and 10 percent ethanol.

"Every car or truck in the country can run on ethanol," she said, referring to the 90 percent gasoline blend. "It is already in about 30 percent of the gas sold in the U.S."

Riley said the rise in gas prices in recent weeks shows the need for an alternative fuel and "ethanol would be a big boost to our grain farmers. It would give them another market for their product."

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