“Evil Ethanol” Saves Americans $0.89 Cents A Gallon

For an alternative fuel that has proven itself viable in other countries, ethanol just can’t get no love in America, despite a new study that reports that blending ethanol with gasoline saved Americans up to $0.89 cents per gallon.

A recent joint study by the Iowa State University and the University of Wisconsin showed that, on average, the 10% ethanol mixture in gasoline pushed down the price of gasoline by an average of $0.25 cents a gallon, and in the MidWest more like $0.39 cents a gallon. Wholesale prices of gasoline were reduced by $0.89 cents a gallon, as ethanol production accounts for 10% of all gasoline sales now.That kind of money adds up when you consider that the average American family buys around 900 gallons of fuel per year. The average family spends about $2,400 a year on gasoline; without ethanol, that price would be closer to $3,200.

The paper, sponsored by the admittedly biased Renewable Fuels Association, also examined what gas prices would look like if ethanol was removed wholesale from the gasoline supply. The result would be gas prices between 40 and 90% higher than they already are, meaning prices in the $5.50 to $7.70 a gallon range.

As a rule, I take any study with a grain (or burlap sack) of salt, and obviously the RFA is probably delighted with the results of this study. On the same token, this is kind of a common sense study. A lot of ethanol is still made from corn, which remains heavily subsidized even as oil prices hover around $100 a barrel. Now, if you had asked me, I would think ethanol knocks off closer to 10% off the price of a gallon of gas, which these days amounts to closer to $0.40 cents a gallon. Ethanol isn’t free, I realize, and running E-85 can actually be quite expensive.

But I am all for anything that reduces our dependence on oil, including ethanol. In may not be the panacea for all our energy problems, but in places like the MidWest ethanol certainly makes more sense than electric cars. And it just so happens it is saving us all a hefty chunk o’ change. If we bumped the blend up to 15%, which studies show has no detrimental affect on older vehicles engines ,(still salty on that one too) we’d probably save even more loot. I won’t hold my breath, but I will hold on to the hope that common sense will eventually overcome partisan politics (I almost wrote parmesan politics. Guess I’m hungry!)

Source: Domestic Fuel | Image: Micheal Cote | Creative Commons Attribution 2.0

Chris DeMorro is a writer and gearhead who loves all things automotive, from hybrids to HEMIs. You can read about his slow descent into madness at Sublime Burnout or follow his non-nonsensical ramblings on Twitter @harshcougar.

 

Christopher DeMorro

A writer and gearhead who loves all things automotive, from hybrids to HEMIs, can be found wrenching or writing- or else, he's running, because he's one of those crazy people who gets enjoyment from running insane distances.