A new study prepared for the Renewable Fuels Association finds that ethanol blending has helped lower gasoline costs during the ongoing Iran conflict, with E10 providing an average cost savings advantage of 38 cents per gallon since the conflict began.
The study was prepared by George Hoekstra, a 35-year veteran of the petroleum refining industry. It examines three sources of ethanol value: the replacement of gasoline volume with lower-cost ethanol, ethanol’s octane value and the value of Renewable Fuel Standard compliance credits, known as RINs.
The economic benefit of E15 has been greater, with the study finding an average cost advantage of 57 cents per gallon during the conflict.
Even without accounting for the impact of RFS blending obligations and RINs, E10 provided a 17.5-cent-per-gallon cost advantage compared with regular gasoline. The study said this demonstrates ethanol’s economic value independent of RIN credit values.
Hoekstra also estimated that the non-RIN portion of the savings equated to $18.7 billion in overall savings for the full year through early August.
The findings come as crude oil prices and geopolitical uncertainty have affected global fuel markets. The study said ethanol blending has helped extend domestic fuel supplies while reducing costs for consumers.
The Renewable Fuels Association said the findings support policies that would expand ethanol blending, including nationwide, year-round E15 availability.
Source: Renewable Fuels Association, "New Study: Ethanol Holding Down Gasoline Prices During Iran Conflict"