The Challenges of an Ethanol Reserve
USDA Secretary Mike Johanns said yesterday tha there are “scientific issues that present a challenge” to storing ethanol for long periods of time.
Ethanol has a corrosive effect on pipelines so it must be shipped by rail, truck or ship to fuel terminals where it is blended with gasoline before going to service stations. In theory, it seems far more feasible for the government to store the corn that ethanol is made from, said Johanns, who also stressed that is not something even under consideration.
Also yesterday, USDA Chief Economist Keith Collins said the cost would be much higher for the government to store ethanol than it pays to store oil in strategic petroleum reserve.
Johanns’ comments on the concept of an ethanol reserve come after the idea was mentioned in early February by fellow cabinet member Energy Secretary Samuel Bodman: “Perhaps we should be thinking about having an ethanol reserve.”
The Renewable Fuels Association, however, said at the time of Bodman’s comments that an ethanol reserve didn’t make sense because every drop was being used.