Poet in talks about an ethanol pipeline to NY harbour

The news that Poet is in talks to discuss the feasibility of a dedicated ethanol pipeline from the Midwest to New York Harbour. Is over the internet like a rash this morning with posts by

Green Car Congress:  POET Joins Magellan Midstream Partners to Assess Dedicated Ethanol Pipeline; Buckeye Drops Out

Yankton Press & Dakotan: Ethanol Pipeline To Be Studied with details of the inshore end of the pipeline

Tulsa World: Magellan: Ethanol pipeline possible This report suggests that the price of gasoline is not important to the potential success of the project.

Like a rash the coverage is pretty repetitious. So here’s something different:

This is a map of the route that is being studied Preliminary-pipeline-route.pdf

Pipelines are big capital projects, and are certainly not guaranteed to be successful. This project relies at least partially in a change in the law covering the Department of Energy’s loan guarantee scheme. Usually that’s the kind of thing that you can’t control very well.

That said if  the pipeline can be built it will take a significant amount of pressure off an important bottleneck in distribution: rail freight. I sugested in January 2007 that pipelines might be more sensible distribution channels than railfreight. Also in that month I suggested that there would need to be a whole load more tank cars to meet demand.  

Competition in for freight should help keep both sides honest and reduce the fundamental problem that there are not enough rail cars to get the volumes that will be needed to market in the future.

The ability to transport ethanol though existing pipelines was recently demonstrated by Kinder Morgan which sent a batch of ethanol 160 miles from Tampa, Florida to Orlando, Florida. The pipeline was upgraded to handle ethanol. It is expected to be open for regular business from November.