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Agricultural News

More Ethanol Equals Lower Gas Prices, Corn Growers Association Says

Thu, 22 Mar 2012 11:11:45 CDT

More Ethanol Equals Lower Gas Prices, Corn Growers Association Says
With gas prices again on the rise throughout the United States, many consumers are driving less or switching to cars and trucks that use less fuel. And gas is certainly on the rise for some time to come, with the U.S. Energy Information Agency estimating the average retail cost of gasoline to be $3.79 per gallon in 2012 and $3.72 per gallon in 2013. Some areas of the country can see gas priced at well over $4 per gallon into the foreseeable future.

When gas prices are this high, most consumers don't want to think about how it can go higher, but there is one factor that, when removed, can drive the cost of gas in your tank significantly higher, the National Corn Growers Association reports - and that is domestic, renewable ethanol.

"It's hard to believe that there are people who want to reduce our fuel supply at a time when prices are this high, but that's exactly what is happening with ethanol opponents," said NCGA President Garry Niemeyer, a corn grower in Illinois. "This is not the time to be reducing our production and use of ethanol, but increasing it, by moving forward quickly with the E15 blend and by building more flex-fuel cars and trucks - and the infrastructure to support them."

In a recent report on ethanol and gas prices (which you can read by clicking here), the Renewable Fuels Association outlined some of the causes of the increased gas prices and noted that economists last year found that using ethanol reduced gasoline prices by an average of 89 cents per gallon in 2010, which means that the average American household spent $800 less on gasoline than would have otherwise been the case without ethanol.

Because much of the movement in gas prices is caused by forces outside our country, another benefit cited by RFA needs to be highlighted, Niemeyer said - it helps reduce our dependence on foreign oil.

Between 2000 and 2011, the percentage of fuel derived from U.S. ethanol rose nine percent; at the same time, U.S. crude oil as a fuel source decreased three percent and the use of foreign oil decreased six percent, Niemeyer noted.

"Those who assert ethanol has no impact on foreign oil are flat-out wrong," Niemeyer said. "In fact, two-thirds of the oil savings of ethanol use come from foreign oil, not the domestic oil market. In 2010, we made and used enough ethanol to displace the need for 445 million barrels of foreign oil - that's keeping money, and the jobs that come with it, in our domestic economy."



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