Ethanol Saves Missouri Motorists Money

Cindy Zimmerman

A study released Monday shows that Missouri drivers are saving money at the pump thanks to ethanol.

John Urbanchuk at Missouri CapitolAccording to research results announced at a press conference in the State Capitol, drivers in Missouri are expected to save an average of 9.8 cents per gallon this year due to the 10 percent ethanol standard that went into effect Jan. 1, 2008.

The study, “Impact of Ethanol on Retail Gasoline Prices in Missouri,” was performed by John Urbanchuk with the economic consulting service LECG and paid for by the Missouri Corn Merchandising Council.

“The mandate went into effect in 2008, but last year 70 percent of the gasoline was voluntarily blended with ethanol,” said Urbanchuk. “So, using actual data for 2007, we calculated that the savings for Missouri was roughly 7.8 cents a gallon. Works out to about $156 million for consumers.”

“Then we looked at 2008 moving forward using current information for prices and projections by the Energy Information Administration,” he continued. “And we concluded that for 2008 the savings are about 9.8 cents a gallon, which works out to about $73 for every driver in Missouri.”

The study does not factor in the increasing use of biofuels like ethanol that are helping to extend gasoline supplies and hold retail pump prices down. According to Merrill Lynch commodity strategist Francisco Blanch, U.S. gas prices would be 15 percent higher without the increasing effect of biofuels. Without ethanol, the price at the pump would be $3.70 a gallon instead of the recent average price of $3.25 a gallon.

Listen to an interview with Urbanchuk about the study here.

A pdf file of the study report is available here.

Audio, corn, Energy, Ethanol, News