By Bob Bouyea
Executive Editor

I recently returned for a trip to see my parents and other family members who live in the St. Louis area. It was an arduous journey of roughly 2,100 miles. Yes, I drove the minivan with the family, including two kids and a 90-pound golden retriever. (Where did the golden retriever sit? That’s right; anywhere she wanted.)

It wasn’t the miles or the togetherness that got to me. As you might guess, it was the price at the pump. Adding to my woes was the fact that, going to St. Louis, we were traveling over the Fourth of July holiday, a time when gas prices typically spike.

But on the return trip a week later, the prices had jumped even higher. Some stations were charging well over $3 a gallon. Refusing to pay that, I continued down the road, squeezing every last drop of gas from my tank to get to the “cheaper” gas. The average price of gas I paid—outside of South Carolina, which has the lowest gas prices in the country—was roughly $2.93 a gallon. Granted, the total amount I spent on gas would have barely covered one plane ticket.

Upon my return, the oil companies explained why gas prices have gone up and have stayed there. It’s because of ethanol. That’s right: ethanol, the biofuel made from corn, sugar cane and other renewable resources that is used as a fuel additive and promotes cleaner emissions.

So, if we want cleaner air, it’s going to cost us.

The companies said they are paying up to $4.50 a gallon for ethanol. What they didn’t say is that the higher cost for ethanol is really a supply and demand issue. Sort of what they were telling us earlier about oil.

Currently, there is not enough ethanol production to meet the demand for the fuel, and when that occurs you typically have higher prices. (Economics 101 at work here.)

But the needed supply is coming as more businesses, including the oil companies, get into this game. Currently in the United States there are 234 ethanol plants, $16 billion worth of investments, either being constructed or expanded to increase capacity.

While most of the plants are being built in the Corn Belt, an increasing number are springing up in unconventional areas such as along the West Coast. Four facilities are planned for the central California valley and one in Oregon, and those five alone are expected to boost ethanol production by nearly 220 million gallons a year by 2008. Currently, U.S. companies produce 3.9 billion gallons a year.

It is possible to greatly reduce our reliance on foreign oil with a concerted effort to develop alternative fuels, including hydrogen. Look at Brazil, a country of roughly 188 million people. Most of the cars there run on either pure ethanol, a blend of 20% ethanol and 80% gasoline or on natural gas. This year the country will declare its energy independence after three decades of pursuing alternative fuels as its national policy, according to a Wall Street Journal report.

The country produces the fuel, made from sugar cane, for roughly $1 per gallon, compared to roughly $1.50 per gallon to produce gasoline. However, ethanol produced from corn costs more to produce because the corn’s starches must first be turned into sugar in order for it to be distilled.

Brazil also is a major exporter of ethanol. The No. 1 importer of Brazilian ethanol is, not surprisingly, the United States, which receives approximately 100 million gallons from the South American country.

This alternative fuels policy also has helped create more than 1 million jobs in Brazil, half in farming and half in processing.

A strong alternative energy policy, like Brazil’s, and the resilience to stay the course could lead us down the path to energy independence. And as recent events in the Middle East have shown, pinning our energy needs on that unstable part of the world would be a foolish policy.

HAPPY BIRTHDAY, RAVENEL BRIDGE: It’s hard to believe that it’s already been a year since the Arthur Ravenel Jr. Bridge was opened to traffic. And it was an accomplishment that was completed well ahead of schedule.

As one who uses it daily to get to our offices in Mount Pleasant, it has been a year of relatively smooth sailing, except for the occasional broken-down car.

It has also changed the Charleston skyline and has become a new icon for the city as its image is printed on just about everything imaginable.

The Grace and Pearman bridges served the area well for many years. Who could forget the narrowness of the Grace and the Pearman with its three lanes?

And every now and again we are reminded of these two with an explosion that brings down another section of the relics.

Here’s to all the years the Ravenel has ahead of it. May your lanes stay clear and your cables strong.

Bob Bouyea is executive editor for the Business Journal. E-mail him at bbouyea@charlestonbusiness.com.

SUBSCRIBE | REPRINTS | CONTACT US

Phone: 843-849-3100    Fax: 843-849-3122