RFA Says Ethanol Helps Gas Prices
The latest average cost for a gallon of gas nationwide, as reported by AAA, is $3.88, but it would already be $4.00 a gallon without ten percent ethanol.
According to the Renewable Fuels Association (RFA), based on current market conditions and federal renewable fuels policy, 10 percent ethanol blends (E10) are keeping gasoline prices $0.12 per gallon cheaper than they otherwise would be.
I talked with RFA Association Vice President of Research and Analysis Geoff Cooper who explains the math behind that calculation (which you can also find on the RFA website) and how the 45 cent per gallon tax credit creates additional savings at the pump for consumers in this edition of “The Ethanol Report.”
Listen to or download the Ethanol Report on gas prices here: Ethanol Report on Gas Prices
8 Comments »
Frank
WHY ISN’T THIS MESSAGE GETTING OUT THERE MORE? Domestic Fuel reports needs to take this message to the New York Times and Wall Street Journal.
JDGadsden
basically ginned up through subsidies. Ethanol has a lower energy per gallon than gasoline, and it still requires petro/diesel/oil to farm and produce ethanol. The last report I saw on the subject is we burn more petroleum based products to produce ethanol than we get ethanol itself, in terms of energy output of both. Has that changed at all lately?
Brian Evers
You are telling me that one week’s price rise in gasoline is all it would cost to remove 6 bln in tax subsidies to the ethanol industry and also lower the cost of corn by 1/2 to help out our meat producers. Sign me up for that plan. 12 cents is nothing compared to driving our livestock producers out of biz and giving my car rotten gas mileage.
Study – Ethanol Saves Consumers 25 Cents at Pump - Domestic Fuel
[...] study confirms that ethanol is playing a tremendously important role in holding down volatile gasoline prices, which are currently inching closer to all-time record highs,” said RFA President Bob Dinneen. [...]
Brian Evers
Bob Dineen should just stop speaking. Volatility and High prices are not necessarily hooked together. Ethanol has not depressed demand for fuel that much. It may have removed some of the cost shown from the gas station sign but it has not decreased the cost of fuel. We are now paying clandestine costs through other channels via tax subsidies to ethanol plants. That 45 cent tax credit, state credits, RFS Mandate, and tariff all are not displayed in the price of E10 yet we crow about how the price appears to be lower than regular. How about we make the gas price 5 cents a gallon and just raise everyone’s income tax to pay the difference. That is the same thing as we are doing right now.
Jeff Smith
I wouldnt consider tax subsidies to ethanol plants “clandestine” nor are they a true cost to Americans. There are several other energy producers receiving subsidies in other ways. The only thing that taxing Americans more to reduce gas costs would do is to send more American dollars to countries that have weapons pointed at you!
Brian Evers
The only other tax subsidies for nonrenewable energy producers are not subsidies at all. They are tax programs for all industries, such as depreciation, tax relief against double taxation and the lot. CNN had a very good article on what the Oil Subsidies actually are. http://money.cnn.com/2011/04/26/news/economy/oil_tax_breaks_obama/index.htm?hpt=T2
Those schills for Ethanol should actually read it because I am sure Dineen is not aware of what he is railing against.
The “clandestine” part of the tax breaks for ethanol is telling the consumer that a lesser quality fuel is cheaper by the gallon without telling them that its that way because we pay gas companies to buy it with a 45 cent federal tax giveaway, X amount of state money, and then protect it from competion by taxing any competing fuels imports. Most of the American public doesn’t know this. Brazilian drivers are more educated about the costs of ethanol than US drivers.
Study – Ethanol Saves Consumers 25 Cents at Pump « Wisconsin Bioenergy Initiative
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