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CARD: Drivers using ethanol saving at pump
By DOUG GRAVES
Ohio Correspondent

INDIANAPOLIS, Ind. — When it comes to lower gas prices at the pump, motorists in Ohio and Indiana can thank their corn growers for the savings. According to a study published by the Center for Agricultural and Rural Development (CARD), the use of domestically produced ethanol reduced gas prices $1.09 per gallon in Ohio in 2011 and saved Indiana motorists $1.69 per gallon.

This equates to nearly $140 billion in total savings, as American-produced ethanol now comprises nearly 10 percent of the nation’s gasoline supply.

“This is good news for Hoosier drivers, who are already feeling the pinch of higher gas prices at the pup,” said Indiana Corn Marketing Council President Mike Shuter. “Hopefully they realize that a fuel made here in Indiana from corn grown right here is helping keep fuel prices down.”

Cited benefits of using ethanol are plenty. Ethanol is cheaper than gasoline, has displaced nearly 500 million barrels of imported crude oil, is a cost-effective source of domestic energy, its use decreases emissions of greenhouse gases from motor vehicles, it is renewable and helps establish a sustainable energy future and it supports tens of thousands of jobs that can’t be outsourced.

“As we work in what looks to be a record-setting corn crop, it is a great feeling to know that farmers can grow more then enough corn to feed and fuel our state and country,” Shuter said.

The 2011 results showed wholesale gasoline prices were reduced by an average of $1.09 per gallon nationwide, while Midwest residents saw additional reductions because of the use of American-made ethanol. The study also found gasoline prices have been lowered by 17 percent, or an average of 29 cents per gallon, from 2000-11 because of the increased use of ethanol.

“Growth in U.S. ethanol production has added significantly to the volume of fuel available in the U.S.,” said Dermot Hayes, Iowa State University professor and one of the authors of the CARD study. “It is as if the U.S. oil refining industry had found a way to extract 10 percent more gasoline from a barrel of oil.

“This additional fuel supply has alleviated periodic gasoline shortages that had been caused by limited refinery capacity. It has also changed the relative prices of gasoline and diesel and allowed the U.S. to switch from being a net importer of gasoline to a net exporter.”

Ethanol has a lower energy content than gasoline, meaning that about one-third more ethanol is required to travel the same distance as on gasoline. But other ethanol fuel characteristics, including a high octane rating, result in increased engine efficiency and performance.

Twenty-seven states in the United States have operating ethanol facilities. According to the Renewable Fuels Assoc., Indiana is the leader in renewable fuels production, ranking fifth nationally in ethanol production. The state has 13 ethanol plants producing 1.04 billion gallons of ethanol annually and contributing $257 million dollars to Indiana’s gross state product. Ohio is home to six ethanol plants and an annual ethanol production capacity of 478 million gallons.

Iowa is the top producer of ethanol, at 3.57 billion gallons. Illinois is third on the list at 1.28 billion gallons. Ohio is eighth, Tennessee is 14th at 225 million gallons and Kentucky is 35th at 23 million gallons.

But Hayes added the cost of producing ethanol remains significantly higher than the cost of producing fuels from petroleum.
“The federal government has given tax incentives intended to make ethanol competitive with gasoline in the motor fuel replacement,” he said. “Continued progress with both conventional and advanced ethanol production technologies could someday result in ethanol production costs competitive with petroleum fuels.”
6/27/2012