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High gasoline prices are making headlines throughout the nation. What isn't getting as much attention is increasing the use of ethanol as a partial solution to the high prices ... until now, that is.
The Consumer Federation of America recently released a report that found oil companies could reduce the price motorists pay at the pump by eight cents a gallon or more if they blended more ethanol into their gasoline.
For those consumers lucky enough to be in a region where ethanol is blended, they will save $80 to $100 this year by choosing ethanol blended gasoline. By any standard, ethanol is a real bargain.
There are currently more than 4 million flexible-fuel vehicles in existence on America's roads. You well may be driving one today. These are vehicles manufactured with the ability to burn E-85, a product that is 85 percent ethanol blended with 15 percent petroleum.
For those consumers lucky enough to be able to purchase E-85 for their car or light truck, the savings could be as much as 68 cents per gallon when compared to regular unleaded gasoline.
At present the wholesale price of ethanol is 30 to 40 cents per gallon cheaper than wholesale regular unleaded gasoline.
When the federal ethanol tax credit is factored in, ethanol becomes nearly $1 per gallon cheaper than the wholesale price of regular unleaded gasoline.
That is a significant price difference. I'm a farmer, and I can tell you that farmers know the value of switching to lower-cost products, when they are available.
Ethanol prices have fallen nearly 30 percent since January, just as crude oil and petroleum gasoline prices have hit record highs.
Ethanol production in the United States has doubled over the past four years and continues to expand to meet demand as the renewable, environmentally-friendly replacement for the fuel additive methyl tertiary butyl ether under requirements of the Clean Air Act.
In conjunction with meeting environmental requirements, the ethanol industry is poised to help America meet current transportation fuel requirements and lower U.S. dependence on fossil fuels and foreign-derived crude oil.
Yet the excess ethanol being produced today that could help bring down fuel costs for consumers and decrease our need for crude oil imports cannot find increased markets and utilization with petroleum fuel blenders.
That means while ships loaded with foreign oil continue heading for the United States — worsening our trade deficit — a lower-cost, cleaner-burning, domestically produced renewable fuel is abundantly available and under-used.
The energy bill making its way through Congress would help.
In its current form, the bill creates a Renewable Fuels Standard requiring the U.S. fuel supply consist of at least 5 billion gallons of ethanol by 2012.
Some members of Congress are calling for an even higher standard of 6 billion or 8 billion gallons, and ethanol production is sufficient to meet that demand.
The petroleum industry opposes anything higher than the 5 billion-gallon standard proposed four years ago, although ethanol production has doubled since then.
It's time for Congress to give consumers a break at the pump and pass comprehensive energy legislation that contains a robust renewable fuels standard. As a farmer and consumer, it just makes good economic sense.
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