Ethanol Blog

Though gasoline prices are higher than last year heading into the Fourth of July holiday, a new Renewable Fuels Association analysis found that E10, or 10% ethanol-blended gasoline, is saving consumers at the pump.

According to AAA, a record 39.7 million Americans are expected to travel 50 miles or more by automobile for the holiday. That is a 5% increase from more than one year ago. The RFA said those drivers will be paying at least 12% less for gasoline -- or 26 cents per gallon -- because of ethanol. Ethanol is expected to reduce household spending on gasoline by $37 billion this year, or $292 per household.

The analysis also shows if E15 was available nationwide in place of E10, consumers would be saving even more money. The wholesale savings currently attributable to E15 is 32 cents per gallon, or 15% lower than E0 gasoline.

"If 15% ethanol blends were used in place of E10 in all approved motor vehicles, the savings would be at least 32 cents per gallon, or 15%," the study said. "Thus, households using E15 could save $364 per year, or roughly $43 billion nationwide. However, arcane regulatory barriers are keeping E15 out of the marketplace in much of the country, meaning consumers are unnecessarily spending an extra 6 cents per gallon on gasoline."

The RFA said United States' dependence on imported oil is falling, as a result of domestic biofuels production. In 2005, the year the original renewable fuel standard was adopted, RFA said, America's net dependence on foreign petroleum peaked at just more than 60%. By 2017, net petroleum import dependence fell to just 20% and would have been 27% without the addition of 15.8 billion gallons of ethanol to the nation's fuel supply.

The RFA said in a news release that in 2017, the ethanol industry supported about 360,000 direct, indirect, and induced jobs across all sectors of the economy. In addition, the industry provided more than $24 billion in income for American households, and generated an estimated $5 billion in federal tax revenue and $5.7 billion in revenue to state and local governments.

Todd Neeley can be reached at todd.neeley@dtn.com

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