There are two current “shows that never end” on News Cut. One is the “WCCO fires Paul Douglas” entry. The other is the “ethanol tax” entry with my unscientific “study” that revealed how much more per gallon I have to spend for ethanol-blended gasoline than your basic “let’s toast the Saudis” blend.
The Wall Street Journal blog picks up the theme of the latter — without crediting, or probably reading, the genius of my ‘study’ — by pointing out that at least one Web site is actively tracking this gap between the blends.
AAA, it says, has been posting the “adjusted E-85 price” as part of its daily gas price survey. Here’s how the adjusted price is calculated:
The BTU-adjusted price … is not an actual retail average price paid by consumers. According to the Energy Information Administration E-85 delivers approximately 25 percent fewer BTUs by volume than conventional gasoline. Because “flexible fuel” vehicles can operate on conventional fuel and E-85,the BTU-adjusted price of E-85 is essential to understanding the cost implications of each fuel choice for consumers.
I had calculated — very conservatively — a 2 or 3 cents per gallon “ethanol tax.” The Journal blog says it’s closer to 8%:
If that spread persists as E85 gains widespread use in America’s cars, rather than the niche of vehicles now equipped for the fuel, the hidden costs for drivers would be akin to upgrading in the current gasoline-oriented world from regular to mid-grade. When was the last time you did that?
Wondering if this is the water-cooler talk at the Ethanol and Biodiesel University convention this weekend in Las Vegas?
3:19 p.m. – Dan McCullough E85prices.com posted a long commentary in the original “ethanol tax” topic (see link above). For straight price comparison, his site is pretty fascinating.