May 11, 2010
(In-Forum) Ethanol blends can curb gas rises
Mr. President, how did you allow 113-octane ethanol futures to trade at $1.57 per gallon on April 27 while 85-octane gasoline futures traded for $2.33 per gallon? U.S. consumers pay dearly for every point of octane! Can you address this in one of your next speeches?
For you see, Mr. President, this 76-cent-per-gallon lower price, combined with the ethanol blender’s credit of 45 cents per gallon, allows the following:
For every 8,100-gallon truckload of ethanol entering a pipeline or gasoline-blending terminal, like the one here in Alexandria, someone in the fuel-distribution system has an opportunity for windfall profit margins because of ethanol’s $1.21-per-gallon net lower price than gasoline, or almost $10,000 per truckload, all while 10 percent ethanol actually enhances gasoline octane levels to a marketable 87 octane!
These market distortions have dropped ethanol profitability and production, leading to lower corn prices for U.S. farmers and more subsidies while gasoline prices and petroleum profits soar!
And yes, Mr. President, I would love to show you what the 45-cent-per-gallon blender’s credit or $5 billion annual cost actually pays for!
So, Mr. President, gasoline prices clearly show it’s time to put 10 percent ethanol in all summer gasoline – just like we have done in Minnesota for years – and address rising gasoline prices with homegrown ethanol!
