Tax credits.
Why is E10 cheaper than 100% gasoline?
- Thread starter TurboFiat124
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Many years ago when I was living in Kentucky, and not understanding what the ethanol fuel designations mean, I put a tank of E85 in my car. Terrible mistake.
My car ran [censored]. The engine didn't run as smooth, and I had a huge loss of power. Fortunately there was no permanent damage to my car. But I never made that mistake again.
That experience motivated me to get more understanding of ethanol as a fuel. And it gripes me to no end that it is so heavily subsidized. Last time I looked into it, not only do the farmers get subsidies, but the ethanol producers do too.
My car ran [censored]. The engine didn't run as smooth, and I had a huge loss of power. Fortunately there was no permanent damage to my car. But I never made that mistake again.
That experience motivated me to get more understanding of ethanol as a fuel. And it gripes me to no end that it is so heavily subsidized. Last time I looked into it, not only do the farmers get subsidies, but the ethanol producers do too.
Originally Posted By: BHopkins
Originally Posted By: TurboFiat124
Can someone explain why E10 is cheaper than 100% gasoline?
It isn't. It's just that you are paying for the ethanol elsewhere other than at the pump . . . in your Federal taxes.
Ethanol production is still heavily subsidized. As pointed out above, you can thank lobbyists. And congress.
And we are not paying for more that what gas costs at the pump? I am quite sure that many good people have died and family lives traumatized keeping the oil spigots open since the first Gulf war. While ME oil is not our primary source, it is for the rest of the world. And oil is a global commodity that goes where it can get the highest price so prices here are also in line with global pricing. But I am still trying to locate the number of military personnel that have died, wounded, beheaded, tortured, etc in the cornfields of the midwest keeping the ethanol production going. Truth be told, if we rolled into the cost of a gallon of gasoline, the total true cost in money and lives that it has taken to keep things stable, the cost of a gallon of gas or diesel would easily be triple of the cost we see now. While at the same time, ethanol futures pricing would be significantly lower.
Even if actual subsidies were being paid to ethanol producers, but were allowed to expire at the end of 2011, I would much rather pay them to make this stuff than sacrifice thousands of young men and women over oil. Not quite sure it is even realistic to equate the two things. I am not willing to put a price tag on a military person's life. Even if we were still subsidizing ethanol producers, even at the tune of $2 a gallon ( 50 cents more than the current actual market value of ethanol), that would amount to 28 billion dollars annually. Pure chump change compared to what we have blown in the Middle East in just a few months. And again, no lives would be sacrificed to make the ethanol. We have never paid upwards of $2 a gallon in subsidies to make ethanol. At the very most, there was a $1 blender credit per gallon.
Originally Posted By: TurboFiat124
Can someone explain why E10 is cheaper than 100% gasoline?
It isn't. It's just that you are paying for the ethanol elsewhere other than at the pump . . . in your Federal taxes.
Ethanol production is still heavily subsidized. As pointed out above, you can thank lobbyists. And congress.
And we are not paying for more that what gas costs at the pump? I am quite sure that many good people have died and family lives traumatized keeping the oil spigots open since the first Gulf war. While ME oil is not our primary source, it is for the rest of the world. And oil is a global commodity that goes where it can get the highest price so prices here are also in line with global pricing. But I am still trying to locate the number of military personnel that have died, wounded, beheaded, tortured, etc in the cornfields of the midwest keeping the ethanol production going. Truth be told, if we rolled into the cost of a gallon of gasoline, the total true cost in money and lives that it has taken to keep things stable, the cost of a gallon of gas or diesel would easily be triple of the cost we see now. While at the same time, ethanol futures pricing would be significantly lower.
Even if actual subsidies were being paid to ethanol producers, but were allowed to expire at the end of 2011, I would much rather pay them to make this stuff than sacrifice thousands of young men and women over oil. Not quite sure it is even realistic to equate the two things. I am not willing to put a price tag on a military person's life. Even if we were still subsidizing ethanol producers, even at the tune of $2 a gallon ( 50 cents more than the current actual market value of ethanol), that would amount to 28 billion dollars annually. Pure chump change compared to what we have blown in the Middle East in just a few months. And again, no lives would be sacrificed to make the ethanol. We have never paid upwards of $2 a gallon in subsidies to make ethanol. At the very most, there was a $1 blender credit per gallon.
Originally Posted By: skyactiv
Corn lobbies are the simple reason why we have E10 gasoline.
There are also corn subsidies which adds to the mess.
Fair enough, but the oil lobby is much,much larger than the ethanol lobby.
The 10million spent from 2008-2014 was greatly exceeded by the oil lobby in just one year
http://www.opensecrets.org/industries/indus.php?ind=E01
Corn lobbies are the simple reason why we have E10 gasoline.
There are also corn subsidies which adds to the mess.
Fair enough, but the oil lobby is much,much larger than the ethanol lobby.
The 10million spent from 2008-2014 was greatly exceeded by the oil lobby in just one year
http://www.opensecrets.org/industries/indus.php?ind=E01
Originally Posted By: TurboFiat124
Can someone explain why E10 is cheaper than 100% gasoline?
Simple, cost and supply and demand also perceived quality.
There are very few stations nationwide have E0, therefore not many refineries produce E0. Low production volume increases cost.
Many, if not most drivers, prefer E0 because it gives them better mileage, therefore they are willing to pay more than E10.
Even if E0 doesn't cost refineries more than E10, they still like to charge more to pad the profit.
Remember cassette vs CD and VHS vs DVD ? Both CD and DVD cost companies less to make than cassette and VHS, but they sold it for more because it had better quality.
For some products, cost to make vs retail price may not go hand in hand. Retail price is usually determined by consumer willing to pay for it, if less are buying it price would go down and opposite is true, more seeking for it than price goes up.
Can someone explain why E10 is cheaper than 100% gasoline?
Simple, cost and supply and demand also perceived quality.
There are very few stations nationwide have E0, therefore not many refineries produce E0. Low production volume increases cost.
Many, if not most drivers, prefer E0 because it gives them better mileage, therefore they are willing to pay more than E10.
Even if E0 doesn't cost refineries more than E10, they still like to charge more to pad the profit.
Remember cassette vs CD and VHS vs DVD ? Both CD and DVD cost companies less to make than cassette and VHS, but they sold it for more because it had better quality.
For some products, cost to make vs retail price may not go hand in hand. Retail price is usually determined by consumer willing to pay for it, if less are buying it price would go down and opposite is true, more seeking for it than price goes up.
Around here 87 octane e0 is 20% more than 87 octane e10.(1.98 vs 2.38 respectively)
Who would pay 20% more for a 10% increase in fuel economy?
As for perceived quality, I won't buy non-ethanol fuel for anything other than the boat unless it is significantly cheaper. The only time I've ever had a fuel related problem was due to the fuel not having any way to handle the condensation in the winter. I just don't mess with anymore and use E10 in everything now.
Who would pay 20% more for a 10% increase in fuel economy?
As for perceived quality, I won't buy non-ethanol fuel for anything other than the boat unless it is significantly cheaper. The only time I've ever had a fuel related problem was due to the fuel not having any way to handle the condensation in the winter. I just don't mess with anymore and use E10 in everything now.
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Still waiting for someone to provide at least a minimum amount of information concerning how much subsidies the ethanol industry received this year or last year. It's all good to come on here and complain against these subsidies but ho about providing a shred of information about them?
Many folks are willing to pay more for pure gasoline in states where pure gas is not prohibited by law (particularly boaters who've had problems with ethanol in their tanks).
If you are in business, you charge what the traffic can bear.
If you are in business, you charge what the traffic can bear.
I think it really comes down to that. Some people are chapped over ethanol primarily because they feel they are being force fed it without their choice and it is in human nature to rebel against that. Nothing wrong with ethanol for majority of situations. No direct subsidies being paid out to it anymore. Some folks just live in areas of the country where their local and state governments do not want them to have a choice. Since they can't seem to get anywhere with their governments, they have to lash out against someone, so the ethanol folks are an easy target.
And each vehicle is different on mpg loss on a particular fuel. My 2015 2500 gets roughly the same mpg from E0, E10, and E15. So, the cheapest price at the pump is easy. It does lose about 2 mpg on E85 compared to these others, but the cost for E85 is low enough that even with the mpg drop, it is still cheaper on a cost per mile basis. So, right now, E85 is in the tank. One of the main reasons I like a flex fuel motor... I can adjust what I use as prices change seasonally and keep my costs as low as possible.
And each vehicle is different on mpg loss on a particular fuel. My 2015 2500 gets roughly the same mpg from E0, E10, and E15. So, the cheapest price at the pump is easy. It does lose about 2 mpg on E85 compared to these others, but the cost for E85 is low enough that even with the mpg drop, it is still cheaper on a cost per mile basis. So, right now, E85 is in the tank. One of the main reasons I like a flex fuel motor... I can adjust what I use as prices change seasonally and keep my costs as low as possible.
Originally Posted By: hatt
Stop with the "subsidized" double talk. The raw material used to make the product is subsidized. Every single bushel. That means the product is subsidized. That's all there is to it.
It's a common tactic for the supporters. Most are on to it, so it's not helping the cause anyway.
I want the ethanol fuel right next to the non ethanol, and let the consumer decide. That will quickly sort it out. Our Government has a poor history with its efforts at central management...
Stop with the "subsidized" double talk. The raw material used to make the product is subsidized. Every single bushel. That means the product is subsidized. That's all there is to it.
It's a common tactic for the supporters. Most are on to it, so it's not helping the cause anyway.
I want the ethanol fuel right next to the non ethanol, and let the consumer decide. That will quickly sort it out. Our Government has a poor history with its efforts at central management...
Originally Posted By: HTSS_TR
TurboFiat124 said:
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Originally Posted By: hatt
Stop with the "subsidized" double talk. The raw material used to make the product is subsidized. Every single bushel. That means the product is subsidized. That's all there is to it.
How so? Only thing I have seen that gets "subsidized" for corn production is the crop insurance program. Only payout a farmer get for that is if a tornado, flood, etc takes out the crop. If that doesn't happen, then the insurance carrier makes all the money from it. Subsidies for both corn price supports and ethanol production have been allowed to die on the vine. Please, show us the actual subsidies paid out per bushel as you state. And it is disingenuous to use cropland set aside payments in your assumptions. That same ground is used for not only corn, but soybean, oat, alfalfa, etc production. That is a soil conservation program, especially for erosion control.
But let's, for the sake of argument, say that ethanol is subsidized to the tune of, say, $1 a gallon. That would be roughly $13 billion per year at present ethanol production. The oil companies, worldwide, get approximately $750+ billion in subsidies of one form or another. The U.S. portion of that alone is over $170 billion. And when you factor in the cost to keep the oil flowing, like the Iraq war, that cost us, from 2004-2010, approximately $14 billion per month, on average. Yep, we got a lot of return on that investment. And I am still waiting for someone to produce the numbers of military casualties from the war over cropland for corn in the U.S. I have been a firm believer that all of the subsidies and military costs to keep things nice for the oil companies should be rolled in to the price of gas at the pump. No then, when you see $6 or more per gallon, you would have justification to send out a hue and cry across the land.
Given the overall picture, even if ethanol was subsidized and farmers were getting massive corn price support payments, I would rather that than the numbers above. I like how some will do everything they can to demonize something, while at the same time, barely show any concern how what they do support is equally, or more so, in the same boat. I am for all energy forms. Whatever offers me the best cost per mile value. Right now, that is E85 in my area. Seasonal pricing changes that from time to time.
Stop with the "subsidized" double talk. The raw material used to make the product is subsidized. Every single bushel. That means the product is subsidized. That's all there is to it.
How so? Only thing I have seen that gets "subsidized" for corn production is the crop insurance program. Only payout a farmer get for that is if a tornado, flood, etc takes out the crop. If that doesn't happen, then the insurance carrier makes all the money from it. Subsidies for both corn price supports and ethanol production have been allowed to die on the vine. Please, show us the actual subsidies paid out per bushel as you state. And it is disingenuous to use cropland set aside payments in your assumptions. That same ground is used for not only corn, but soybean, oat, alfalfa, etc production. That is a soil conservation program, especially for erosion control.
But let's, for the sake of argument, say that ethanol is subsidized to the tune of, say, $1 a gallon. That would be roughly $13 billion per year at present ethanol production. The oil companies, worldwide, get approximately $750+ billion in subsidies of one form or another. The U.S. portion of that alone is over $170 billion. And when you factor in the cost to keep the oil flowing, like the Iraq war, that cost us, from 2004-2010, approximately $14 billion per month, on average. Yep, we got a lot of return on that investment. And I am still waiting for someone to produce the numbers of military casualties from the war over cropland for corn in the U.S. I have been a firm believer that all of the subsidies and military costs to keep things nice for the oil companies should be rolled in to the price of gas at the pump. No then, when you see $6 or more per gallon, you would have justification to send out a hue and cry across the land.
Given the overall picture, even if ethanol was subsidized and farmers were getting massive corn price support payments, I would rather that than the numbers above. I like how some will do everything they can to demonize something, while at the same time, barely show any concern how what they do support is equally, or more so, in the same boat. I am for all energy forms. Whatever offers me the best cost per mile value. Right now, that is E85 in my area. Seasonal pricing changes that from time to time.
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