With Rising Gas Prices, is E85 a Better Deal?

by Brian McGraw on March 17, 2011

in Blog

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No. A few reports have surfaced across the country about motorists with flex fuel vehicles beginning to fuel up with E85 rather than regular unleaded gasoline (E10). From the perspective of an uninformed consumer, E85 costs less than unleaded gasoline. It also gets worse mileage. Look at this article from Minnesota:

“E85 is almost always priced less than gasoline, and many flex fuel vehicle owners in this region have been choosing the lower priced fuel for years,” said Kelly Marczak, Director of the clean fuel and vehicle technologies program for the American Lung Association in Minnesota. “Today, the price difference is so large, even people who had never used E85 before are giving it a try.”

Marczak said that while E85 delivers less miles per gallon than gasoline, the broad price spread between the two fuels makes E85 a bargain for many flex fuel vehicle owners.

This is untrue, and its almost certain that Marczak is aware that its not true. The most recent average price spread I could find for average fuel prices in Minnesota is here. It lists the average price of E85 at $2.87 and the average price of gasoline (presumably with 5-10% ethanol) at $3.45.

For consumers to be better off financially purchasing E85, the price of gasoline would have to be approximately $4.37 with the E85 price holding at $2.87. Pure ethanol gets roughly 66% of the mileage that pure gasoline is capable of reaching, as a result, you must buy a lot more gasoline to drive the same number of miles. This can be confirmed by checking the Department of Energy’s Flex Fuel Cost Calculator. They make it really easy to find out how much money you lose each year using E85.

As you can see here, E85 prices tend to track gasoline prices pretty closely, so without funneling taxpayer dollars into making E85 even cheaper, or a technological breakthrough, this is unlikely to happen anytime soon.

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