A major shortcoming for ethanol producers in the USA, is that outside of the midwest, it is very hard to come by.

So I was intrigued to hear that Green Plains Renewable Energy has just finished renovating the the rail spur running from Red Oak, Iowa to Shenandoah. The spur, will serve the 50 million gallon per year ethanol plant being built by Green Plains in Shenandoah, Iowa.

Rail transport - long derided in the States - works at its best over 1000s of miles, carrying large amounts of freight. That's why one can expect to see a lot more of this kind of ethanol-train link up in the years to come. I don't doubt that Californians and New Yorkers would buy ethanol / E10 / E85 if they could get their hands on it. But distributing large amounts by diesel trucks over big distances has just not been cost-efficient.

As oil prices have risen, so train freight starts to look like a better bet.