Ethanol Saves Billions at the Pump
Posted: March 28, 2008
Over at the NCGA Web site, there is an article by CEO Rick Tolman about what the economy would be like without ethanol. One study cited therein mentions that gasoline would cost 5 to 10 cents more at the pump. So, one could extrapolate, ethanol saves consumers between $7 billion and $14 billion a year in gasoline costs.
Another authority has now come out with a higher figure. Francisco Blanch, who directs commodities research and strategy at Merrill Lynch, was cited this past week in the Wall Street Journal with research that “oil and gasoline prices would be about 15 percent higher if biofuel producers weren’t increasing their output.”
Time again to pull out the old slipstick and do some math.
The U.S. Department of Energy estimates the United States will use 9.32 million barrels of motor gasoline per day in 2008. This equates to 142.9 billion gallons for the year. If the average estimated pump price is $3.21 per gallon in 2008 (according to the DOE), then a 15 percent savings is $0.48 per gallon. Comparing this over the entire U.S. gasoline usage for a year equals a national savings of $68.59 billion.
There ought to be a rule that whoever wrongly puts all the blame for higher food prices on ethanol must also credit the industry for reducing the cost of gasoline.