Local sales and prices of ethanol are rising with skyrocketing gasoline prices.
The corn-based fuel, which is 85 percent ethanol mixed with 15 percent gasoline, has been touted for years as a possible solution for easing U.S. dependency on foreign oil.
But if the past few of weeks are any indication, switching to ethanol will not save consumers much at the pump, and any relief is a long way off.
Considering the additional cost of purchasing a flex-fuel vehicle that can use ethanol and the small number of stations offering it, switching from gas to this alternative fuel seems an unlikely solution for lessening petroleum dependence.
General Motors has sold more than 1.5 million flex-fuel vehicles, yet there are only three locations in Maryland selling ethanol to the public.
Wan Kang?s Quick-Mart Citgo in Annapolis is one of them. He?s been selling much more ethanol at $2.79 per gallon since gas prices soared. But when he called his distributor this week to order some more, he got a surprise. “They told me the price would be about $3 per gallon,” he said.
Fort Meade Service Center Chevron has also seen an increase in ethanol sales. The station is also selling it for about $2.79 per gallon.
An ethanol station in Montgomery County has seen an increase in sales volume.
“We have been selling more ethanol since gas prices have gone up, but the price for a gallon has also risen from $2.49 to $2.79 in less than a week,” said Helen Sangliani, a worker at the county facility.
This is to be expected, said Matt Hartwig, a spokesman for the Renewable Fuels Association, a Washington, D.C.-based organization representing ethanol producers.
“It?s the supply and demand of the marketplace,” he said.
He added that it will be a long time before ethanol can replace gasoline.
“In 2005, we produced 4 billion gallons of ethanol,” he said. “In the U.S., we consumed 140 billion gallons of gasoline last year.”
Another alternative to gasoline- and ethanol-dependent vehicles is the hybrid car, which uses regular gas and runs part of the time using battery power. The battery is automatically charged as you drive the car.
James Akinola, sales manager at Castle Toyota in East Baltimore, said there has been a spike in hybrid sales as gas prices soar to historic highs.
“Customers like the fact that Toyota hybrid vehicles can give them from 40 to 60 miles per gallon,” Akinola said.
But hybrid cars cost more. A regular Toyota Camry MSRP starts at $19,320, while a Camry Hybrid?s price tag is $25,900. It could take years to make up the difference, depending on the price of a gallon of gas.
Just the facts
» Myth: High spot-market prices for ethanol are driving up the price of gasoline.
» FACT: More than 85 percent of ethanol sold in the U.S. is done so on long-term contracts (six to 12 months). Most of these contracts are “fixed price.” In other words, the price an oil company pays for the ethanol doesn?t change, regardless of changes in the market price of ethanol.
» Myth: Gasoline refiners are required or mandated to remove MTBE, an additive, from gasoline.
» FACT: The removal of MTBE from the marketplace is a decision gasoline refiners have made voluntarily and unilaterally. No federal requirement mandates the removal of MTBE.
Source: Renewable Fuels Association
