Ethanol producer says pipeline operators are figuring out how to handle the fuel

A major obstacle to the continued growth of the ethanol industry is the inability to ship the fuel in pipelines, where condensation of water can contaminate the product. Pipeline companies are figuring out how to prevent that, and ethanol will be in pipelines before too long, the CEO of the country's second-largest ethanol producer predicted yesterday.

Don Endres of VeraSun Energy Corp., based in Brookings, S.D., told Doug Cameron of Dow Jones Newswires that the condensation problem can be resolved by alternating shipments of ethanol and unleaded gasoline. Shipping in pipelines, rarher than rail or truck, would improve logistics and reduce costs for the industry.

"Endres predicted the first pipelines -- which are also being developed by Brazilian ethanol producers, who make the fuel using sugar -- would be short, running to local rail lines," Cameron writes. "However, he forecast the development of long-haul pipelines running from the Midwest corn belt to the East Coast and from the eastern edge of the region to southern states." (Read more)