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Is Green the New Black (Gold) ?

Maybe yes and maybe no.

There have been mixed reports about the prospects of the ethanol industry, but with bigger political support and higher gasoline prices a number of companies are on the verge of IPO’s.

Analysts caution about risk, even as they see industry fundamentals improving.

Now, E85 is not just somebody’s science project. It is already widely used in Sweden and Brazil.

In fact, way back when, a variant of Ford’s Model T was capable of running on gasoline or ethanol. So was the 1927 Model A!

Some facts about E85, an alcohol fuel mixture of 85% ethanol and 15% gasoline:

gaspricesedgeup.jpgAs of 2005, E85 is often sold for up to 36% less than gas (much due to governments subsidies)

There are only about 675 stations in the US where you can fill up your tank. Most are in the Midwest.

In order to use E85, you must have an E85 flexible fuel vehicle (FFV).

In a recent press release, the Big Three have announced plans to double FFV production to 2 million vehicles by 2010

After-market conversion kits are generally not legal in states with emission controls.

Yes, Green may be the new Black, but it’s not a gusher yet.

(Previously published in the print version of “Pumps,” Vol. 2)

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