Ethanol To The Rescue of Higher Gas Prices

January 17, 2018

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by Dave VanderGriend (Urban Air Initiative/ICM/Biofuels Digest) ... A lot of people might forget that it was only three years ago when the average price of a gallon of regular gasoline cost $3.34 and at times nudged the $4 mark. Dropping below $2.50 from 2015 through 2017 made it easy to forget that gasoline is not only expensive but we have very little control over it. Well, get ready for a costly reminder.

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Ethanol continues to sell for significantly less than gasoline, about 40 cents cheaper. That means the 14 billion gallons already being used across this country for E10 is saving American motorists nearly $500 million annually. Translate that your wallet and it represents a $6 per fill-up savings for of an average 15 gallon tank. And if you have access to higher blends of ethanol, like E20 or E30, the savings are even greater. Mid-level blends are premium high octane fuels selling at regular prices.

And we need to be thinking in these terms– high octane fuels are going to be the norm over the next decade. The efficiency gains in light duty vehicles are dramatic with higher octane fuels. And the auto industry is looking at variable compression engines, turbocharging, and other ways to squeeze mileage out of cars while reducing carbon.

But let’s talk about real savings. A 25-30% blend of ethanol is proving to be the sweet spot in terms of performance, mileage, and overall value. Doubling or tripling up on the 40 cent differential not only puts real money back in all of our pockets but sends our friends at OPEC a message that they are not going to going to set the rules of the game anymore.

And not to be overlooked are the health cost savings ethanol can bring by replacing toxic aromatic compounds in gasoline. The slow, painstaking road we have taken to finally come to grips with the dangers of tobacco and second hand smoke is a lesson we need to apply to gasoline. The same carcinogenic particulates can be found in both and like tobacco, we need to kick the habit.

In the biofuels sector we can work with the oil and auto industries and make a better fuel. READ MORE

What Could Push Oil To $100? (OilPrice.com)

Some "back-of-the-envelope" analysis from Advanced Biofuels USA as of 1/17/2018:

US Wholesale Fuel Prices: Gasoline and Ethanol Mixtures: As of 17 January 2018

	E10	E15	E30	E85

BOB Gasoline Price	$ 1.86	$ 1.86	$ 1.86	$ 1.86
% BOB	90%	85%	70%	15%
BOB Contribution	$ 1.67	$ 1.58	$ 1.30	$ 0.28

Ethanol Price	$ 1.36	$ 1.36	$ 1.36	$ 1.36
% Ethanol	10%	15%	30%	85%
Ethanol Contribution	$ 0.14	$ 0.20	$ 0.41	$ 1.16

Combined Wholesale Price	$ 1.81	$ 1.78	$ 1.71	$ 1.43

% Reduction over BOB Price	2.7%	4.0%	8.1%	22.8%