Menu

by Seth Teter

Several organizations are speaking out in response to media reports that have pointed the finger at ethanol for the rising cost of gasoline.

John Doggett, vice president of the National Corn Growers Association, said he has been receiving calls from corn growers across the country upset about media attacks on the corn-based fuel.

"They're angry about it, and they know it's not right, and they want us to say something about it," he said.

Some reports have attributed high gas prices in part to the phase-out of the fuel additive methyl tertiary-butyl ether or MTBE. Environmental concerns have led U.S. refineries to replace an estimated 2 billion gallons of MTBE with cleaner-burning ethanol.

According to the Energy Information Administration, increased use of ethanol will affect gasoline prices this summer by "just a few pennies."

"While gasoline prices may indeed be increasing over the next month or so, it's not going to be because of ethanol," said Bob Dinneen, president of the Renewable Fuels Association.

American Farm Bureau Federation President Bob Stallman said everyone expected the MTBE phaseout, but "what we did not know was that high oil prices would coincide with this same time frame." High crude oil prices are the primary reason for high prices at the pump, he said.

Dinneen noted that a 50-cent rise in the price of ethanol would only lead to a nickel increase in gas prices. Ethanol is commonly blended with gasoline at a rate of 10 percent.

"Were it not for the tremendous growth of the U.S. ethanol industry and the availability of ethanol, refiners' decisions to eliminate MTBE this spring would send gas prices through the roof," he said.

Terry Fleming, executive director of the Ohio Petroleum Council, agreed that the move toward ethanol-blended gasoline is not driving fuel prices.

"It plays a role, but I would say a small role," he said.

Petroleum companies have accepted ethanol as a component of the nation's fuel supply, he said, and it would not be a surprise if some build their own ethanol plants.

"I think they're absolutely convinced that it is here to stay ... but it's not the panacea," he said.

Fleming noted that many Ohio drivers already use a 10 percent blend of ethanol, but it may not be labeled at the pump.

"People might be buying ethanol and not even know it," he said.

But with high demand for ethanol, drivers have also seen rising prices for E85, a blend of 85 percent ethanol, 15 percent petroleum.

"This is a short-term issue with the tightness of ethanol supplies," explained Dwayne Siekman, executive director of the Ohio Corn Growers Association (OCGA).

Siekman said while high prices will temporarily hinder the development of an E85 infrastructure, there are an additional 25 to 35 retailers that want to bring the fuel to the state.

Siekman also said that even though demand for ethanol is currently ahead of domestic production, more facilities will soon be online. According to OCGA, 33 ethanol plants are under construction nationwide and production capacity is expected to expand by 2 billion gallons within 12 to 18 months.

As far as claims that ethanol is leading to high gasoline prices, Siekman said to remember where that message was coming from, referring to petroleum companies.

"Just keep in mind the profits that those companies that are badmouthing ethanol are raking in right now," he said.

Exxon Mobil, the world's largest petroleum company, posted a record $8.4 billion profit in the first quarter.