The Ethanol-Gasoline Cost Gap
Posted May 14, 2013
Ethanol advocates often assert that ethanol costs less per gallon than gasoline while trying to justify the Renewable Fuel Standard (RFS). While it’s true that on a gallon-to-gallon basis ethanol historically has been cheaper than gasoline, ethanol contains far less energy than gasoline and therefore has cost consumers more to travel the same distance, as I pointed out (here, here and here). Look at the graphics below, produced by EPA and the Energy Department: The real costs to consumers, measured in fuel economy, has been significant.
As you can see, vehicles that can run on either gasoline or E85 (average 74 percent ethanol content) get significantly fewer miles per gallon when using comparatively low energy ethanol blended fuels. This means that in addition to the extra money consumers have been forced to spend per year if they choose to use E85, they also have needed to refuel more often. The recent rise in corn prices suggests this price difference could continue.
Sure, consumers have the right to choose which fuels to purchase. But Big Ethanol should stop the misinformation campaign that glosses over the fact that ethanol has been a more expensive fuel. Promoting the benefits of mid/high-level ethanol blends, while basically ignoring the higher cost on a per-mile basis, is a disservice. Ethanol has some favorable properties and makes a good additive, but misleading consumers, claiming it has been less expensive than gasoline, is shameful and unfair.
The ethanol mandates in the RFS are unworkable and need to be repealed. If ethanol advocates want to claim otherwise and use the government to force consumers to buy their historically more expensive product, they should make their case based on the facts.