Biofuels company Poet and Magellan Midstream Partners announced a joint venture recently to study whether they can build a dedicated ethanol pipeline from Midwestern states to the northeast part of the United States.
The 1,700-mile pipeline would cost more than $3.5 billion, and would take ethanol from manufacturing plants to distribution terminals.
The public discussion about ethanol tends to focus on political issues like reducing our dependence on foreign oil, air quality and the efficiency of producing ethanol. This is the first time we've heard about the post-production delivery of the product.
But it makes sense to find new efficiencies, and a dedicated pipeline may have a big effect on the future viability of biofuels. The wind energy people talk all the time about the importance of delivering electricity produced by windmills to end users in Minneapolis, Chicago or other places the power is needed.
There is uncertainty about how ethanol will be made in the future, perhaps switching from corn as a raw material to other crops or sources, but we do know that it will always need to be transported to end users. While there might be concern about electric cars replacing conventional cars, we can't imagine there being much of an impact on the sale of domestically-produced ethanol in the next few decades.
The project is just in the study phase, but we're excited about the possibility of new efficiency coming to an industry that helps South Dakota so much. We hope this opportunity comes to fruition.
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