Opinion: Gas prices would have been worse if not for ethanol

Kearney Hub  • Posted: Wednesday, September 5, 2012

Here’s a useful fact that will make you sound like a conversational genius at the next cocktail party. When talk turns to the high cost of gasoline, remind everyone that for every billion gallons of ethanol added to the nation’s fuel supply, gasoline prices are reduced by six cents.

That swell little fact is courtesy of Louisiana State University, and it’s worth remembering, not just because it could make you popular at social gatherings, but also because it underscores the value of adding alternate energy sources to our nation’s portfolio.

Whether it’s wind turbines, solar panels, ethanol or a source that’s yet to be developed, we’re all better off when we can offset traditional energy sources with new alternative energy.

For example, wind turbines might be expensive to build, but the wind is free and clean. Megawatts of wind-generated electricity enter the grid without burning an ounce of coal or any fossil fuel.

That’s good for the environment.

Blending ethanol is good for the pocketbook.

A study by the Center for Agricultural Development shows ethanol production helped to reduce wholesale gasoline prices by an average of $1.09 per gallon in 2011, saving each U.S. family about $1,200 at the pump last year.

Burning blends of 10 percent or more ethanol offsets the need to import petroleum and conduct costly and environmentally risky exploration for oil here in the United States.

On a more personal level, the offsetting effect of ethanol helps deaden the sting of news like we heard last week while Hurricane Isaac was battering the Gulf Coast. While coastal Americans were battened down for the big blow, tankers were unable to offload their cargoes of foreign oil.

Hurricane Isaac shut down nearly 95 percent of oil production and a million barrels a day of refining capacity in the Gulf region, but the resulting spike in gasoline prices might have been worse if not for the diluting effects of ethanol.

The homegrown fuel is helping to stabilize gas prices, even when severe weather interrupts the flow of imported oil.