Ethanol reduced gas prices on average for 2010 32% - Iowa State

http://westernfarmpress.com/markets/ethanol-reduced-gas-prices-89-cents-2010-study-claims


The increased use of ethanol reduced wholesale gasoline prices by an average of $0.89 per gallon in 2010, according to a new study conducted by economists at Iowa State University and the University of Wisconsin and released by the Center for Agricultural and Rural Development (CARD).

(average price for gas in 2010 was $2.79. $.89 is 32% of $2.79.)


http://www.card.iastate.edu/publications/synopsis.aspx?id=1160

Based on the data of 2010 only, the marginal impacts on gasoline prices are found to be substantially higher given the much higher ethanol production and crude oil prices. The average effect increases to $0.89/gallon and the regional impact ranges from $0.58/gallon in the East Coast to $1.37/gallon in the Midwest.

here's a link to the pdf of the report: http://www.card.iastate.edu/publications/dbs/pdffiles/11wp523.pdf

period. While energy (mostly petroleum when talking about farm produce) was a larger proportion of ALL food products. So, ethanol put's pressure on corn prices (a fraction of the total farm output) but ehtnaol also reduces petroleum prices which impacts a larger fraction of the cost of producing ALL farm produce.

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2009/04/09/BUHL1704UL.DTL


"..Thursday's report from the Congressional Budget Office gives some ammunition to each side.

Researchers found that ethanol production was responsible for 10 to 15 percent of the increase in food prices between April 2007 and April 2008. As new ethanol biorefineries opened across the country, corn prices rose, causing a wave of price increases for everything from corn-syrup sweeteners to meat from animals fed with corn.

But ethanol production wasn't the only culprit.

Between 22 and 36 percent of the overall increase in food prices can be traced to the rising cost of traditional energy sources such as gasoline, diesel and electricity, according to the report. Virtually every step of food production - from planting to transportation to processing - consumes fuel or electricity. The period covered by the report also saw record-breaking oil and gasoline prices."
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The increase in ethanol production was HUGE in 2007-2008 meaning a big increase in it's demand for corn. But, in 2009-2010 (and likewise from 2010-2011) the increase in ethanol production wasn't nearly as much as back in 2007-2008 timeframe so the impact on corn prices is much less. But now ethanol represents a bigger part of the fuel supply .. abaout 9.6% ... and this does impact gas prices significantly (see OP).

Since petroleum is such a significant part of the cost of producing so much of our food, ethanol has the affect of lowerinng the price of ALL farm commodities .. NOT JUST CORN. So the net effect is a just about a 'wash' (actually it's quite possible ethanol's net effect is to reduce the price of food items over-all).



http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=115x193027


http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=115&topic_id=194230

http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=115&topic_id=165403


Testimony of Edward P. Lazear Chairman, White House Council of Economic Advisers:

http://georgewbush-whitehouse.archives.gov/cea/lazear20080514.html">Testimony of Edward P. Lazear Chairman, Council of Economic Advisers Before the Senate Foreign Relations Committee Hearing on "Responding to the Global Food Crisis" Wednesday, May 14, 2008


" Because corn only represents a small fraction of the IMF Global Food Index, we estimate that the increase in total corn-based ethanol production has pushed up global food prices by about 1.2 percentage points of the 43% increase in global food prices, or about 3% of the increase over the past twelve months. This estimate includes the indirect effects of the increase in corn-based ethanol production, through crop substitution and spillover effects into other food products. Looking back to 2005 and 2006, the effect of increased ethanol production on food prices during these two years taken together has been of similar magnitude."

ethanol production in 2010 was about 47% higher than in 2008 and prices do not vary with increased demand or supply on a linear basis.


Great info. :toast:

OF course, this is violates certain religious beliefs that ethanol is the molecule from hell. So this won't get much attention. :yoiks:

I don't like that deal. It should cost less than regular.

grades that's up to them. But over-all, ethanol by increasing the supply of fuel is bringing down the price of gas. We would be in much worse shape without the extra 10% of fuel supplied by ethanol.