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Sunday, October 19, 2014

Why Ethanol Free Gas is More Popular than E85

Sign at a gas station that sells only ethanol free gasoline

Cross-posted from Energy Trends Insider

Sam Avro, Energy Trends Insider editor, recently received an inquiry from a reader about the popularity of ethanol free gasoline in the Midwest. Coincidentally, I recently visited Indianapolis and had noticed a large billboard advertising ethanol free gasoline.

I thought I’d share what I found. Much to my surprise, there are about 8,000 gas stations offering ethanol free gasoline and only about 1,200 offering  E85 (85 percent ethanol). There are about ten million flex fuel cars on the road designed to burn E85. Assuming a cost of about $100 per car to make it flex fuel, and assuming that about 10% of flex fuel cars actually use E85, this would mean that consumers have paid about nine billion dollars for nothing.

Why is ethanol-free gasoline so much more popular than E85? I poked around in comment fields to come up with a short list of reasons, some rational, some not so much.
  1. Many consumers realize that E85 reduces gas mileage, but this is largely irrelevant when E85 is cheap enough to make up the difference. Maybe people don’t want to bother running the numbers every time they use E85 to figure out if  it’s cheaper or maybe they don’t want to visit gas stations thirty percent more often.
  2. Others fear that gasoline with ten percent ethanol might harm their car. This is a rational concern only for owners of older cars.
  3. Some consumers don’t want to use gasoline with corn ethanol for ethical reasons. Using food stock to produce car fuel increases the cost of basic food staples like corn meal and eggs, which impacts the poorest of the world far more than it does the richest.
  4.  Still others don’t want corn ethanol in their fuel because of its negative environmental impact. When farmers plant corn instead of some other crop it causes a dominoe effect where farmers in other parts of the world create farmland to plant the crops replaced by corn. Many thousands of acres of wildlife habitat (conservation reserve land) has been converted back into corn  fields as farmers understandably use unproductive land to capitalize on the record breaking high price of corn thanks to government mandated consumption of corn ethanol creating a demand that continues to exceed supply (thus the tripling in the price of corn).
  5.  Yet others buy ethanol free gasoline as a way to protest government mandated consumption of what they believe is an inferior product.
Although I am unaware of any environmental organization that supports corn ethanol, some states have made it illegal to sell ethanol free gasoline. Go figure.

As part of writing this article, I discovered that there are two gas stations serving ethanol free gasoline within a few miles of where I live. If I didn’t drive an electric car, I might be buying ethanol free gasoline, for some rational reasons and maybe a few not so rational ones.

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