Reply #65: Ethanol costs more than gas [View All]

[54anickel]

http://www.freep.com/apps/pbcs.dll/article?AID=/20060216/BUSINESS01/602160488/1014/BUSINESS

The heavily promoted alcohol fuel called E85 might cut America's oil use and help support U.S. agriculture, but it's not reducing motorists' fuel bills. It's boosting them significantly.

The price of E85, a fuel that's 85% ethanol made from grain and 15% conventional gasoline, is higher than that of gasoline, even though E85 has only 72% as much energy. The U.S. Department of Energy says a vehicle has to use 1.4 times as much E85 as gasoline to go the same distance.

At some Nebraska stations, E85 was $2.19 a gallon Tuesday, while gasoline with 10% ethanol -- a common substitute for regular in the Midwest -- was $2.06. "This doesn't make sense," says Wayne Davis, a division manager at fuel company Bosselman, based in Grand Island, Neb. "Our customers are saying, 'I'm not going to buy E85, which is better for the environment and the economy, unless it's cheaper.' We're seeing E85 just sit."

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Ford Motor and General Motors are working with fuel companies to boost the number of E85 stations in the Midwest. The two automakers say they will build about 600,000 vehicles this year with the special equipment needed to use E85. About 5 million already are on the road. All that emphasis could be negated by pricing.

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on edit:

I just had a flash back to when unleaded gas was first introduced - also more expensive but new cars required it. I had an old classic '67 Camero back in the '80s and had to purchase bottles of lead additive when I fueled up as leaded gas was already long gone by then. (Yeah, I'll admit I was a selfish, non-environmentalist back then - damn, it was a fun ride!) They could go through the same process to switch over, but I doubt the big oil companies would allow that to happen.