Americans are fighting back as gasoline rises above $4.00 per gallon by reducing their driving.

Video: U.S. See Record Drop-Off in Driving

Technorati Tags: economy, gas prices

Has anyone else wondered why E85 prices always seem to track the price of regular unleaded gasoline? I’ve noticed that there aren’t that many good deals for E85 — unlike in other states (and we’re in a major corn growing state) — our E85 prices are consistently staying a certain number of cents below the price of regular unleaded.

One blogger suggests that E85 dealers could be making a significant profit by marking up E85 a lot more than what it really costs them to purchase. I don’t know enough to know if this calculation is right, but it would be interesting to keep an eye on the Chicago Board of Trade ethanol figures and what is being charged at the pump.

From Non-FFV Running E85:

In response to my post regarding E85 price fixing, one anonymous person shed more light on the price to produce and transfer E85, in order to better determine if gas stations are price gouging on E85.

Here is the new equation:
(Current Ethanol Price – $0.51 Blender Credit) X 0.85
+ (Current Unleaded Price X 0.15)
+ 0.184 Federal Tax
+ 0.20 Michigan Tax
+ 0.03 Estimated Freight Charge per Gallon
= Cost to Gas Station

Let’s run these numbers with the current price of ethanol (05/06/2008):
[($2.45 - $0.51) X 0.85] + ($3.65 X 0.15) + $0.184 + $0.20 + $0.03 = $2.612 per gallon E85

One television news report suggests that corn-based ethanol might not be such a great deal. (Note in the report, E85 in New York State is going for $2.99/gallon and regular unleaded is $3.99/gallon — why are we paying so much when we have so much corn in Indiana?)

We need to be careful that we don’t kill off alternative fuels by overpricing them and by using up food crops that drive up America’s food prices, when we could be focusing on using more powerful alternatives (why can’t we use sugar cane ethanol, like Brazil?). America could easily be energy independent, if we really wanted to be. We just never seem to have to will to really make alternative energy work in the U.S.

Video: Is E85 Just Hype?

Related: E85 – Ethanol as an alternative fuel

Technorati Tags: alternative fuels, E85, E85 / Alt Fuels, E85 prices, gas prices

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