Ethanol pipeline project good news
The pipelines that link oil fields to shipping points and refineries are a well-known feature of the oil industry. It could well be that something quite similar may one day link the ethanol refineries of the Midwest with markets on the East Coast – possibly as soon as 2014
That’s the vision being explored by Magellan Midstream Partners of Tulsa, Okla., and Sioux Falls, S.D., based POET, the nation’s largest producer of ethanol.
The two companies announced a joint development agreement March 16. The initial task is to determine the feasibility of the project.
In 2008, Magellan, in partnership with Buckeye Partners of Breinigsville, Pa., began an assessment to determine where, when and how such a pipeline could be constructed. A tentative routing was proposed, in which a 1,700-mile pipeline would stretch from northwest Iowa to New Jersey. The pipeline envisioned was intended to carry 4.5 billion gallons of ethanol annually. Buckeye is no longer involved in the project, but could re-emerge as a factor since some of the right of way it owns might be used for the pipeline should this approach prove feasible.
The potential advantage of a pipeline over present rail and truck transport of ethanol would be lower shipping costs.
There are technical issues yet to be resolved, but the pipeline concept warrants serious study. The ethanol industry must embrace innovation if is to remain viable long-term. A pipeline could help make the product more attractive in markets distant from the Midwest.
The decision to consider a pipeline that would start right here in north central Iowa illustrates vividly the emergence of Iowa a major supplier of renewable energy.
The ethanol boom has slowed somewhat due to relatively low oil prices. Even so, no one expects oil to remain this affordable for very long. Once the recession abates, demand for energy will begin to grow more rapidly, oil prices will go up and the role of ethanol as an alternative to foreign oil will increase.
The pipeline project being considered by POET and Magellan shows confidence in the future of ethanol. Farm News welcomes this commitment to enhancing ethanol’s marketability.
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