In early May, Iowa State University and the University of Wisconsin released a study indicating that in 2010, the blending of ethanol with gasoline reduced pump prices by an average of $0.89 per gallon. This is a $0.25 increase in savings thanks to the extra ethanol produced last year. In addition, the study, sponsored by the Renewable Fuels Association (RFA), found that in 2010 alone, ethanol reduced the average American household's gasoline bill by more than $800. RFA president, Bob Dinneen, was quick to chime in with his thoughts on what these findings indicate:
This 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. As rising oil prices are contributing to higher retail costs for everything from gas to food to clothing, ethanol is clearly providing some real relief for American families.
Furthermore, the study examined the impact of removing all ethanol from our fuel supply and claims to have found that, "under a very wide range of parameters, the estimated gasoline price increase would be of historic proportions, ranging from 41 percent to 92 percent." Domestic Fuel points out that such an increase would push pump prices from roughly $4 a gallon to perhaps economy-crippling levels of between $5.60-$7.70. Um, no thanks.
[Source: Domestic Fuel | Image: cote – C.C. License 2.0]

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