75 comments on Gasoline Prices Part II: Long-Term Factors
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75 comments on Gasoline Prices Part II: Long-Term Factors
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GAIA Host Collective
I think the ethanol has a double impact for raising summer prices:
1. The lower BTU impact you talk about.
2. Required adjustments to the gasoline base (RBOB) to which it is added which tend to reduce the amount of gasoline produced in the summer months.
The relatively lower amount of gasoline produced from a barrel of crude also has an adverse impact on prices. Since ethanol is now used primarily in the summer months, this is basically a summer-months issue, and helps to drive up prices in the summer. This issue may actually help gasoline supplies (and prices!) in the winter, if the fractions that must be removed when ethanol is added can be added back in outside of the summer months.
I tried to explain this a little more here.
Speaking of the ethanol impact, I have noticed in my neck of the woods that the higher grades which use ethanol are now higher than in the past. Used to see them stay at ten cents higher for each grade, 87 89 91. now they are 12 or sometimes 15 cents higher per grade.
I can only quess its because of the ethanol costs, but maybe not.
Quid Clarius Astris
Ubi Bene ibi patria
In Minnesota E-85 sells at forty cents per gallon less than 87 octane regular. We are, of course, a pro-ethanol state.
Don
I'm curious if you know if it sells at that price differential. Assuming gas is selling for $3/gal in Minnesota, that would make the BTU content equal to about $2.10/gal for E85. At 2.60, I wouldn't think anyone would buy it. I've been told by a rural Nebraska supplier that he stopped carrying E85, because even in the middle of the corn growers, they wouldn't buy it because it wasn't economical for their big pickups and Suburbans, etc. (Don't know what the price differential was at the time.) A vehicle that gets 17mpg on regular, gets 12mpg on E85. Of course, I think our state vehicles are mandated to use it. Maybe your state has additional mandated vehicles running on it. One way they can "cheat", is that E85 can contain between 15-30% gasoline. Since it doesn't work well in cold, this is the time of year Minnesota sales of it should be high if they are going to use it at all!
Thanks for the article, RR.
The costs at the pump and these numbers make me wonder. why the cost of the extra octane at the pump is 20 cents or more a gallon higher that regular.
How much ethanol is needed (whats the octane of the Ethanol
rating in Minn at at the pump.
Seems to me if you are running a high octane vehicle it would be worth your while to drop in a gallon of ethanol or so (you could figure it out to be close) with 19 gallons of reg. and save some decent money.
Quid Clarius Astris
Ubi Bene ibi patria
My reliable sources tell me that for driving a flexfuel Ford Taurus that there is no difference in cost between driving on E-85 and regular 87 octane. I think that is because the engine has been optimized for driving at higher octane than 87, and of course, ethanol boosts octane rating.
Were any mtbe needed to boost the gasoline to 87, or is ethanol added to the blend of all grades, is ethanol in 87. Robert seemed to be surprised that 87 was the standard octane in many states. I have never seen 85, except maybe in Denver, I don't think I saw it in LA.
What is the octane rating from the refined "gasoline" and where do they start adding ethanol to up the octane.
Quid Clarius Astris
Ubi Bene ibi patria
In Minnesota ethanol at 10% is added to all grades of gasoline with few exceptions. You can get pure gasoline with no ethanol in it, but in the seven county Metro area you have to pay hyper premium prices to get it at very very few gas stations.