USDA report on ethanol transport appears; ethanol pipeline prospects again in focus

The USDA published its report on ethanol transportation and logistics, Expansion of U.S. Ethanol from the Agricultural Transportation Perspective. “Transportation is a major cost for ethanol producers and balancing these expenses with needed infrastructure can be critical to sustained profitability,” said Agricultural Marketing Service Administrator Lloyd Day.

The report looks at truck and rail options for corn and fuel shipments. Rail accounted for 60 percent of ethanol shipping, with 30 percent handled by trucks and 10 percent by barges.

Ethanol pipeline construction has come under recent scrutiny since an official at the Nebraska Ethanol Office confirmed that plans were under discussion by several private firms to develop an ethanol pipeline from the Midwest to fuel markets such as Chicago and California. Currently, the state’s 950 million gallons ethanol exports travel by two weekly 2.5 million gallon trains from Lincoln to California and a similar train to Chicago traveling at less than a weekly frequency.

Terminal operators and transport companies such as Kinder Morgan Energy, Colonial Pipeline, NuStar Energy and Magellan Midstream Partners have so far declined the $1 million per mile investment.

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