Ethanol pipeline a possibility, to link Nebraska to Chicago, California, Southeast

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.

Nebraska’s ethanol exports are expected to reach 2 billion gallons by the end of next year. VeraSun has indicated that it sees an additional market of 250 million gallons in Atlanta and 650 million gallons in California.

Gasoline giant Valero is expecting to increase its ethanol blending in the Midwest, and possibly Memphis or Colorado, according to company spokesmen. But all companies agree that terminal operators and transport companies such as Kinder Morgan Energy, Colonial Pipeline, NuStar Energy and Magellan Midstream Partners are key players in establishing ethanol pipeline infrastructure.

Costs are estimated to cost $1 million per mile of pipeline, and the terminal operators have believed that return on investment is uncertain.

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