Ethanol Distribution, Trade Flows, and Shipping Costs
The distribution system for U.S. transportation fuels evolved over many decades. The infrastructure and equipment were originally developed for liquid petroleum fuels, and ethanol was integrated into the system as it became an important component of gasoline. Petroleum fuels are distributed from the major refining areas in the U.S. Gulf Coast, and to a lesser extent, from western and eastern ports to consumer markets. Since oil refineries are not evenly distributed throughout the United States, the industry has developed a sophisticated transportation network to deliver its products nationwide and also meet the demand of high- consumption areas with dense populations, such as the East Coast, the West Coast, and along the Gulf Coast. Petroleum fuels are generally transported long distances by pipeline, ship, and barge to fuel terminals. When gasoline arrives at a terminal, it usually is blended with up to 10 percent ethanol to make E10. Trucks are then used to move the finished fuel to local retail gas stations or other end-use locations.
This report chapter is from Gallagher, P. and M. Denicoff, “Ethanol Distribution, Trade Flows, and Shipping Costs”, Chapter 5 in U.S. Ethanol: An Examination of Policy, Production, Use, Distribution and Interaction with the Corn Sector, J. Duffield, et al, eds, Office of Energy Policy and New Uses, US Department of Agriculture, September 2015.