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Saturday, February 28, 2015

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Ethanol & Your Engine

Ethanol and Your Vehicle

Ethanol helps keep gas pump prices affordable by adding to the overall motor fuel supply in the U.S. In fact, the Consumer Federation of America reports that drivers who purchase gasoline blended with up to 10% of ethanol save up to eight cents per gallon as compared to straight gasoline purchases.

All vehicles can use a blend of up to 10% ethanol. Ethanol is most commonly sold to motorists in the “E10” blend – 10% ethanol, 90% gasoline – which burns cleaner than gasoline. Manufacturers of small engines (boats, lawnmowers) also make their engines compatible with gasoline containing a blend of up to 10% of ethanol.

E85 is an alternative fuel that is made up of 85% ethanol and 15% unleaded gasoline for use in flexible fuel vehicles (FFVs). The flexibility lies in that the owners of FFVs have the option of using E85, straight unleaded gasoline, or any blend of ethanol up to 85%. It is possible, though quite difficult, to convert your non-FFV vehicle to operate on E85, but automobile makers are increasing their FFV lineups each model year.

Ethanol and Gas Prices

Not only does Ethanol not drive up the price of gasoline, but the addition of ethanol to American fuel has helped to keep prices down during times of tight supply. A 10% blend of ethanol receives a federal tax credit of 5.1 cents per gallon, savings that can be passed along to consumers at the pump. It’s like an instant tax credit for buying an American-made product.

Nearly 5 billion gallons of fuel is provided by the U.S. ethanol industry to the national supply each year. A larger fuel supply means less price volatility, especially when gasoline refining capacity is tight as it has been. Gasoline refining capacity has been exhausted, and no new refineries have been built in 30 years. Conversely, the U.S. ethanol industry is building production facilities at a rate of nearly two per month. The removal of ethanol from our nation's supply would mean we'd immediately need to find 3% more fuel, thus leading to dramatic spikes in fuel prices.

Ethanol Transportation

Most ethanol, about 75%, is transported by rail, which is an efficient, reliable way to transport ethanol from the Corn Belt to its markets. Trucks are used to transport small quantities of ethanol shorter distances, and barges ship larger quantities longer distances.

The Renewable Fuels Standard (RFS)

On August 8, 2005, President Bush signed the Energy Policy Act of 2005 into law. The comprehensive energy legislation includes a nationwide renewable fuels standard (RFS) that will double the use of ethanol and biodiesel by 2012. Under the RFS, a small percentage of our nation's fuel supply will be provided by renewable, domestic fuels including ethanol and biodiesel, providing a positive roadmap for reduced consumer fuel prices, increased energy security, and growth in rural America. The increased use of renewable fuels should expand U.S. fuel supplies while easing a refining industry that is already overburdened.