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.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
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.
-
Amid Mounting Uncertainty: Five Forecasts About AIThe Kiplinger Letter With the risk of overspending on AI data centers hotly debated, here are some forecasts about AI that we can make with some confidence.
-
Worried About an AI Bubble? Here’s What You Need to KnowThe Kiplinger Letter Though AI is a transformative technology, it’s worth paying attention to the rising economic and financial risks. Here’s some guidance to navigate AI’s future.
-
Will AI Videos Disrupt Social Media?The Kiplinger Letter With the introduction of OpenAI’s new AI social media app, Sora, the internet is about to be flooded with startling AI-generated videos.
-
What Services Are Open During the Government Shutdown?The Kiplinger Letter As the shutdown drags on, many basic federal services will increasingly be affected.
-
The Economy on a Knife's EdgeThe Letter GDP is growing, but employers have all but stopped hiring as they watch how the trade war plays out.
-
Banks Are Sounding the Alarm About StablecoinsThe Kiplinger Letter The banking industry says stablecoins could have a negative impact on lending.
-
Apple Readies for AI Upgrade with New iPhonesThe Kiplinger Letter The tech giant has stumbled when it comes to artificial intelligence, but a new batch of iPhones will help it make headway.
-
Japan Enters a New Era of Risk and ReformThe Kiplinger Letter Japan has entered a pivotal moment in its economic history, undertaking ambitious policy and structural reforms to escape from decades of stagnation.
