AGRIBUSINESS: New Study Shows Increased E85 Consumption Can Have Big Impacts

Just in the last week – 24 new stations have started offering E85. This brings the total number of stations offering this ethanol blend up to 139 this year. The expansion comes on the heels of a study released by Iowa State University’s Center for Agricultural and Rural Development.

The study by Professor Bruce Babcock found that it’s feasible to meet 2014 and 2015 biofuel mandates with expanded E85 consumption given the existing number of flex-fuel vehicles and stations that sell E85.

The Renewable Fuels Association says other key conclusions of the study include that current high RIN prices create a large incentive for oil companies to increase consumption of E85 because expansion in E85 consumption will decrease RIN prices and that pricing E85 low enough to generate fuel cost savings has the potential to quickly increase ethanol consumption – perhaps by three-billion gallons over the next year or two.

RFA Director of Market Development Robert White says E85 is in high demand and growing as retailers begin to see the advantages of offering the high level blend at their stations. He says the price savings can be seen across the country as more and more drivers demand additional fuel options and cheaper prices at the pump.

For example, www.E85prices.com shows the cheapest E85 price in Iowa is $2.39 per gallon. That’s just over one dollar below the average gasoline price of $3.49 per gallon.

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