Kinder Morgan Energy Partners LP, a pipeline business, is in the final stages of retooling the 16-inch gasoline pipeline running from Tampa, Florida, to Orlando that will be the first ethanol pipeline in the country. September 16 is slated for the first test on the pipeline.
Earlier this year, Florida Governor Charlie Crist signed a new law that required all gas stations to sell E-10 by 2010, making the state a major hub for ethanol distribution in the coming years.
Since the establishment of the national 36-billion-gallon renewable fuels standard for ethanol, more states are requiring E-10 gasoline and promoting E-85 pumps. Infrastructure around the industry is starting to catch up to the market and policy. As rail lines develop new terminals and auto companies help promote E-85 stations, there is more talk about pipelines than ever before.
If the Florida pipeline works, it would be a major step in ethanol infrastructure. Ethanol could become more profitable for marketers and production plants because it could be up to 15 cents a gallon cheaper to ship. Pipeline companies have avoided ethanol until now because of the composition. Ethanol absorbs water, which makes it more corrosive, forcing Midwest ethanol producers to rely largely on trains to ship the product. Pipelines could transform the industry.