Despite claims by detractors that ethanol makes the price of fuel more expensive, a new analysis released by the Renewable Fuels Association shows that over the past four years, ethanol has been the most economically competitive motor fuel and octane source in the world.
The ABF Economics study found that even after accounting for transportation costs to the reference markets of Los Angeles, Chicago, and New York, ethanol came out far cheaper than gasoline blend stock, according to RFA Senior Vice President Geoff Cooper. “The average over the past four years has been a 30-40 cent per gallon discount, and that’s been as high as a dollar in some cases,” he said.
Cooper says the study also found U.S. ethanol has been more cost competitive than Brazilian ethanol which has particular relevance in the California market. “Over the past four years, U.S. based ethanol has been 80 cents per gallon less expensive than ethanol imported from Brazil,” said Cooper, noting that Brazilian ethanol gets a lower carbon intensity score under California’s low carbon fuel standard. “So consumers in the California market place are bearing that cost,” he added.
Cooper adds that bigger corn crops and more efficient use of corn in making cellulosic ethanol will also contribute to lowering the cost of production.
Listen to Geoff explain the findings of the analysis here:
Geoff Cooper, Renewable Fuels Association