Monday, May 23, 2011

Ethanol Lowers Fuel Prices!

A new study shows that the use of American ethanol saved the average U.S. motorist about $800 last year.

The study, by Iowa State University and University of Wisconsin, economists says that without ethanol, gasoline prices in U.S. would rise almost 92%.

The impact of ethanol production on U.S. and Regional Gasoline Markets for the period 2000 to 2010 was evaluated by economists the Center for Agricultural and Rural Development at Iowa State University. The results of the study, released last week, show that blending ethanol with gasoline had a dramatic effect on lowering fuel costs.

  • The CARD study says that increased use of ethanol reduced wholesale gasoline prices by an average of $0.89 per gallon in 2010.
  • Midwesterners benefited the most from ethanol because last year they saved $1.37 per gallon compared to the national average of $0.89.
  • The growth in ethanol production reduced gasoline prices by an average of $0.25, or 16% over the entire decade of 2000 - 2010.
  • Department of Energy data shows U.S. gasoline use averaged 138 billion gallons per year from 2000 to 2010, resulting in an annual average savings due to ethanol of $34.5 billion.
  • Last year alone, ethanol reduced the average American household's gasoline bill by more than $800, according to the Renewable Fuels Association.
  • Since ethanol now makes up nearly 10% of the gasoline used in automobiles in the U.S., CARD's economists measured the impact of ethanol's disappearance from the fuel market. If ethanol was no longer available, gas price increases would be of historic proportions, rising by as much as 92% in the short-term.

Click HERE for the study, go to

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