Group says ethanol helped U.S. cope with higher fuel prices

While gas prices have gone down dramatically since reaching highs of more than $4 per gallon this summer, a new study has found ethanol helped people cope during the summer of high gas price discontent.

According to the American Coalition for Ethanol (ACE), ethanol will save Americans more than $1 billion this year.

 "With ethanol selling for a dollar less per gallon than gasoline, Americans will benefit from ethanol this year through savings of $1 billion to $1.25 billion," said Ron Lamberty, vice president/market development for ACE. "And this doesn't begin to factor in the savings to consumers as ethanol has expanded our domestic fuel supply and has helped drive down gas prices."

 According to ACE, current published rack prices have ethanol selling for about $1 per gallon less than gasoline. 

Based on expected ethanol production of approximately 9.4 billion gallons this year, Lamberty said total national savings due to ethanol will be between $1 billion and $1.25 billion.

Nebraska is the nation's second leading ethanol-producing state with 24 ethanol refineries capable of producing more than 1.6 billion gallons of ethanol, according to the Nebraska Ethanol Board.

According to calculations from the Nebraska Ethanol Board, in Nebraska, savings to consumers so far this year have been more than $70 million.

"That is based on market share throughout the year, which today, is 79 percent for E10 blends and assumes some small volume displacement with E85," said Todd Sneller, Nebraska Ethanol Board administrator.

In Nebraska, Sneller said there are 44 stations selling E85.

At some locations in Nebraska, E85 sales have amounted to 20 percent of the station's total sales.

Sneller said ethanol has been one of the prime factors in helping  Nebraska's economy withstand the economic downturn affecting the rest of the nation with the help of the $70 million that's retained in the economy.

"From the perspective of the consumer, there will be more disposable income for things other than fuel when consumers are using E10," he said. "E10 offers consumers a considerable savings at the pump, and those savings can be applied to other necessities for the household, and that is something most consumers will appreciate given the economic strains that many families are under."

One of the factors why gasoline prices are down, according to Lamberty, is that consumers are using less fossil fuel derived  from gasoline because of expanding ethanol production nationwide.

"Ultimately, that makes more fuel available and drives down the prices at the pump," Lamberty said.

But according to ACE and Sneller, there's a way to help drive gasoline prices down even further.

Because of ethanol's blending economics, Lamberty said adding more ethanol to each gallon of gasoline would mean additional savings. 

He said that at today's volume and prices, Americans would save $1.62 billion annually if every gallon of gas contained 10 percent ethanol. Moving to E15 would take the nation's annual fuel savings to $2.23 billion, Lamberty said.

He said ethanol is the "most promising domestic supply of fuel this country has today."

"It doesn't need to be drilled for or imported," he said. "It doesn't require more years of laboratory study or significant changes to infrastructure. It is less expensive and a lot cleaner than gasoline, and it is here today. We need to be allowed to use more of it."

Sneller said that ethanol is making a "fairly significant contribution to the state's economy."

"In the absence of that, we are spending all of those dollars for oil that's coming from outside of Nebraska and outside of this country," he said. "It's that combination of the lower cost and that much of that fuel is produced here in the state."

And along with the $70 million in saving because of the E10 and E85 blends, Sneller also said that on the average, Nebraska's ethanol plants each generate about $80 million annually of economic activity or nearly $2 billion, based on studies by Nebraska Public Power District.

Despite the controversies surrounding ethanol, such as the food vs. fuel debate, Sneller said it has been a good year for this alternative, domestically produced fuel.

"At a time when we have difficulties in the economy nationwide we can look at a lot of sectors that are performing badly and ethanol continues to show its sustainability and durability even in very difficult times," Sneller said.