E85 Price Rises in April Due to Infrastructure Issues

3 years 7 months 1 week ago Monday, May 05 2014 May 5, 2014 Monday, May 05, 2014 3:36:00 PM CDT May 05, 2014 in News
By: Tyler Greever, KOMU 8 Reporter
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COLUMBIA - Throughout the month of April, the price of E85 gasoline has increased more than local oil marketers have seen before.

According to E85prices.com, the price of E85 has risen from an average of $2.76 per gallon in March to $3.13 per gallon in April. That is the highest mark for E85 prices since May 2013, when the price was $3.36 per gallon.

E85 gasoline is made up of 85 percent ethanol, while regular gasoline in Missouri is made up of at least 10 percent ethanol.

The increase in price for E85 brings it much closer to the price of regular gasoline. Regular gas averaged out at a price of $3.35 per gallon for April.

While E85 is still cheaper, drivers still may be paying more once they factor in the energy output they get on E85 versus regular gasoline.

According to the U.S. Department of Energy's 2014 Clean Cities Alternative Fuel Report published in January, drivers paid less per gallon with regular gasoline when both fuels were put to an energy equivalency test. Alternative fuels such as ethanol hold a lower energy content per gallon that gasoline. The U.S. Department of Energy calculates that when gas is $3.34 a gallon and E85 is $3.04 a gallon, a driver using E85 has to spend $4.29 on that fuel to go as far as $3.34 in gas will take him.

Bradley Schaad, the ethanol policy director at the Missouri Corn Growers Association, said the spike in ethanol price deals with how it's being shipped out.

"The price of ethanol has went up the past month due to a shortage of being able to get ethanol out to where it's needed on the coast," Schaad said. "We do use a lot of ethanol here in the Midwest, but more of it is sold across the United States on the coast and they do that by rail due to some things that aren't being allowed for ethanol to go through the pipeline."

Schaad said he knows consumers are worried about their pocketbooks, but that some will still choose to use E85 due to it being better for the environment and it helping keep business local.

"Clean air benefits is one of the main things you're getting out of it," Schaad said. "You're also helping an industry here in Missouri rather than shipping your dollars overseas. I would rather choose my energy from the Midwest rather than the Middle East but at the same time, I understand it affects everybody's pocketbook."

Tom May, the director of public relations for MFA Oil, said consumers narrow their choice between regular gasoline and E85 down to two factors.

"They're doing the math and saying what is the most economical decision for me to make to burn in my car," May said. "For other consumers, they're absolutely supportive of the ethanol industry."

May said this spike in ethanol price does not happen often, but he can see why it happened with how the United States currently stands in energy infrastructure. 

"It's really a rare occurrence. Don't look for it being that way on a regular basis," May said. "With the infrastructure issues we have in our country with energy, and not wanting to build pipelines and utility lines and all the infrastructure needs we have as a country, these kind of things are going to happen."

Even though the ethanol price was high in April, Schaad said the price is starting to come back down.

"In the last week, a lot of that build-up has been reduced down," Schaad said. "It's getting close to a dollar per gallon difference between whenever you're looking at the price at the ethanol plant to where gasoline is being sold." 

Currently, according to E85prices.com, the average E85 price in Missouri is at $3.29 per gallon, while the average gas price is at $3.37 per gallon.

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