I’m a free market guy at heart, so when it comes to ethanol I’ve questioned the the benefits of E85 compared to its economic and environmental costs.
There’s no doubt, though, that when the price gap widens between gasoline and ethanol, people use more ethanol. That’s especially true with the 85 percent ethanol fuel E85, where its price advantage to gas has jumped by a third since December.
Data from the state Commerce Department show E85 consumption jumping at the start of the year as the price gap with gas began to widen (click on the chart for a larger view)
In December, the average price difference between gas and E85 ran about 48 cents a gallon, according to data from the website E85prices.com. On Wednesday, the price difference hit 64 cents a gallon.
I’m still skeptical ethanol can survive without government subsidies. But for now it’s a deal for consumers who are able to use it.