Department of Energy study finds ethanol pipeline could be profitable under certain conditions

CB Online (Canadabusiness.com)
By Dirk Lammers, July 20, 2010 - 3:18 PM

SIOUX FALLS, S.D. (AP) - A dedicated ethanol pipeline could be profitable if the biofuel expands beyond its use as a 10-percent additive in standard cars, a new government study suggests.

A U.S. Department of Energy study released Monday said the nation would first have to boost its use of the alternative fuel either through greatly expanded use of E85, an 85-percent blend that runs in flexible fuel vehicles, or a transition to 15- and 20-percent blends in standard cars.

Assuming ethanol demand volume of 2.8 billion gallons a year and a project construction cost of $4.25 billion, a pipeline would need to charge an average tariff of 11 cents more per gallon than if the fuel was moved by rail, barge or truck.

Read more