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The Folly of Biden’s Ethanol Mandate
President Biden has authorized the use of E 85 gas for the summer. According to Business Insider, ethanol wholesales for $2.22 per gallon, and gasoline wholesales for $3.20 per gallon. Gasoline has 33% more energy than ethanol, so the gas equivalent price of ethanol is really $2.95 per gallon (2.22 x 1.33=2.9526). So the difference in price is 25 cents per gallon, but because the increase in percentage of ethanol is only 5% (moving from 90 percent to 85 percent) the actual savings per gallon is about 1.25 cents per gallon (25 x 5% = .0125).
In other words, consumers may pay less per gallon of the blend, but they will pay essentially the same amount per mile traveled. I doubt going to E 85 will affect the wholesale markets for gas and ethanol much, but if it does the effect will be to make gas a little cheaper, and ethanol a little more expensive, reducing the overall cost differential.
So that is the cost savings. There are, of course, other consequences. The price of food will increase by some amount as more corn is turned into more ethanol. The impact in the US is likely minor but overseas, more poor people will starve. Pollution will presumably get worse, since the reason to not have E 85 in the summer was air quality. I am sure there are other drawbacks, including increased demand for fertilizer at a time when the price of NPK is increasing.
All of this is to create the illusion that the price per gallon is lower, when the price per mile is essentially the same. Why does President Biden think people won’t notice their weekly gas spend is about the same?
Published in Economics
Drill Baby Drill > Husk Baby Husk
Biden and the rest of the left don’t care about any of that.
Way to go Brandon!
DO NOT EVER PUT ANY FUEL WITH ETHANOL IN ANY SMALL ENGINE!!!! Yes, I’m telling. No lawnmowers, chain saws, string trimmers, utvs or atvs, boat engines—most of the time, the 87 octane is left in the tank over the winter, and then you wonder why it’s so hard to start done spring. It eats diaphragms, seals, tubing, gaskets, meaning a carb rebuild or replacement.
Where do you find gasoline that has NO ethanol?
You can put it in, just don’t leave it in over the off-season. Run the engine dry before storing it.
It’s pretty much impossible to get non-ethanol fuel in many parts of the country.
Did I read about some kind of additive that would like “bind to” or something, the ethanol, making it chemically irrelevant?
Does something like Sta-Bil do that?
Its all an exercise in optics. The Biden Administration wants the appearance of doing something. Something that would appear to be designed to lower fuel prices, but only superficially, but also put upward pressure on corn prices. Corn is a super food. Because its also used as feed for live stock, increasing the price of corn will cascade through the entire food chain – increasing the prices of all meats, eggs and dairy.
The producer price index was up by nearly 12% for March… I think inflation will be measured at 15% within the next quarter…
No matter how cynical I become, its impossible to keep up with the industrial media complex.
When we started diverting corn for ethanol production, there were corn shortages in Mexico.
We should at least give those places some warning that they need to start growing their own.