Report Shows Ethanol Kept Gas Prices Lower in 2011

rfaAn update to a 2009 report from the Center for Agricultural and Rural Development (CARD) on the impact of ethanol on domestic gasoline prices was released today, showing that ethanol reduced wholesale gasoline prices by $1.09 per gallon nationally last year. Renewable Fuels Association President and CEO Bob Dinneen says this peer-reviewed study shows how ethanol is keeping gas prices lower than they might otherwise be.

“The results are significant,” Dinneen said. “It reflects the fact that ethanol is less expensive than gasoline today and is displacing ten percent of liquid transportation fuel today and has a huge impact on the price of crude oil.” The $1.09 per gallon impact is 20 cents more than the previous year.

Dinneen explains that the $1.09 a gallon savings means that ethanol reduced the average American household’s spending on gasoline by more
than $1,200 last year, based on average gasoline consumption data. “Since 2000, ethanol has helped save $39.8 billion annually in excess gasoline costs – or roughly $349 per household per year,” he said.

Ethanol Report PodcastSince the study is based on just 10% ethanol in the nation’s gasoline supply, Dinneen notes that increasing that under the E15 waiver approved by EPA can only result in more savings. “If you’re going to be adding 50% more of a product that is less expensive than gasoline to the overall blend, you’d be providing consumers an even more significant benefit,” he said. “We believe the economics of ethanol are going to drive E15 into the marketplace this summer.”

Listen to Dinneen talk about the new report in this edition of “The Ethanol Report.” Bob Dinneen Discusses Impact of Ethanol on Gas Prices Report

5 thoughts on “Report Shows Ethanol Kept Gas Prices Lower in 2011

  1. Pingback: Study: Ethanol Lowers Iowa Gas Prices - Domestic Fuel

  2. And I suppose the study did not look at the impact using corn for fuel had on food prices? I wonder if the savings would be offset.

  3. Get the facts. The corn used was never earmarked nor could it ever be used for human consumption. If there is any problem, it is the fact that the “artificially” low prices did not cause our country to develop an energy strategy or “change our ways”.

  4. @Jim:
    That’s not entirely correct. Ethanol is from feed corn which isn’t directly consumable by humans; however, it is the same corn used to feed animals which are edible by humans.