Business Regulation
More Ethanol Coming to Your Gas
The EPA approval will please growers and others in the industry. Drivers, less so.
By Drake Lundell, Associate Editor, The Kiplinger Letter
January 2010
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The Environmental Protection Agency will give a thumbs-up for a 50% increase in the amount of ethanol that can be blended into the fuel supply, but don’t expect it to have much effect on gasoline prices.
The agency will approve the increase for cars built after 2007 as early as September and for all cars built after 2001 in November -- as more test results come in -- so the full effect of the move won’t be felt until 2011. That will give service stations plenty of time to adapt. Most states will likely offer E15 -- 15% ethanol and 85% gasoline -- in addition to the ubiquitous E10. Also available in more places is E85, which is specially blended for flexfuel vehicles that can use any blend up to that level.
The increase is being pushed by Growth Energy and other ethanol lobbying groups, which say the industry is already confronting the “blend wall” -- the point at which ethanol blending is at the 10% level. In 2009, ethanol accounted for 8.8% of the fuel supply in the U.S. This year, for the first time, ethanol companies have begun to export ethanol in significant quantities because not all of the product can be used domestically.
Ethanol currently sells for about $1.55 per gallon on the spot market, 47¢ under the price of gasoline with which it is blended. Plus blenders receive a federal tax credit of 45¢ per gallon. But since ethanol produces about 30% less energy than gasoline does, the price differential is unlikely to have a big effect on gasoline prices at the pump.
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Reader Comments (6)
Posted by: trep at 07/20/2010 10:53:08 AM
An increase in ethanol will cause a serious problem for boaters. The EPA has caved-in.
Posted by: Dick at 07/20/2010 11:13:57 AM
It is time to stop this ruse. These mixes using ethanol are not fuel conservation. When you add 10% ethanol to gasoline you lose 10% in fuel mileage. Ethanol was initially added to fuel as an additive to reduce pollution and this sacrifice of mileage was acknowledged. MTBE needed to be removed from fuel and a quick alternative was needed. Let's get corn back where it needs to be in the food chain.
Posted by: craze at 07/20/2010 12:36:08 PM
do not forget that ethanol eats seals..... so if you are going anywhere and letting the car sit for 2 weeks or longer with ethanol in its system do be surprised when the fuel pump fails. can we bill the government and the ethanol lobby for the failed car parts and repair bills. another screwing by our special intrest laddend govt reps.
Posted by: Brad J at 07/20/2010 09:29:05 PM
Cost considerations aside, when is anyone going to talke about the reduction in fuel economy (MPG) that will come from the new blend, since ethanol produces only about 75% of the energy as that produced by the same volume of gasoline? Or that ethanol from corn is only marginally more "green" than gasoline with respect to the input energy required to produce it? Until we start using ethanol from efficient non-food sources or crops that require little in the way of additional fertilizer or maintenance (as Brazil has done with cane sugar ethanol), this is a political, not an environmental, initiative to keep the heavily subsidized corn farmers happy. Poor public policy, poor environmental policy, poor economic policy.
Posted by: Jim at 07/20/2010 09:52:15 PM
What is wrong with this agency? Doesn't this take food out of our mouths? The corn is used to feed animals which in turn we have beef, poultry, and other animals that are fed with corn, including people ! Not only that, I hear a lot of people that complain that they get worse milage with fuel with ethanol in it. It must still be about money ! I was wondering if there is some thing different their doing with the diesel, Is it just me or is it my imagination that My diesel pickup is getting worse milage about 200 miles less to the tank. ! Used to get 750, now 550. About 1,000 miles ago changed fuel filter. No leaks under it either.
Posted by: WRX STi at 07/21/2010 06:11:39 PM
keep e85 growing!!!! we need more stations evreywere... e85 is better for the motor making a octance reading close to 105 instead of 91. and in CA the 91 is even worse...so E85 stations need to open up more all over the states. Less pollution. Way more power gains when getting a tune! with a custom tune u can make about 75 more hp to the wheel with bolt on's on stock turbo in a WRX STi. i got 20-22mpg on highway . were reguler sti gets 24mpg...so i will sacrafice the 2miles and get the 75 more hp. These tree huggers and hippies need 2 calm down if u dont want it then dont use it thats why theres other options at the pump.!