Is the Price Right?

Cindy Zimmerman

Tuesday’s USA Today had an article on how expensive E85 is compared to full fledged gasoline or 10 percent ethanol blends that might have given some ethanol proponents heartburn. But, it is indeed a fact that E85 currently does cost more in most areas unless the retailer chooses to make it less expensive for promotional reasons. And the article rightly notes that the main reason for the higher price has been higher demand driven by refiner needs for ethanol to replace MTBE. And the article also rightly notes that E85 has about 72 percent as much energy as conventional gas. So, the conclusion is that if gas costs $2.286 per gallon, the price of E85 should be 72 percent of that or $1.646 per gallon. That makes sense and it’s possible that will someday be the actual case.
EPICBut, I had a little conversation about this yesterday with Tom Slunecka, executive director of the Ethanol Promotion and Information Council, who pointed out that the benefits of ethanol to the environment, to the economy and to the domestic security of the country are intangibles that add to the value of ethanol.
“Consumers need to be purchasing ethanol more on its value and less on its price. And now more than ever, they need to be committed to making a change in philosophy as to what fuel they are choosing to put in their vehicles,” Slunecka said.
And that is also true.

EPIC, Ethanol