By Robert Pore
robert.pore@theindependent.com

According to a new report from the American Coalition for Ethanol (ACE), ethanol is currently reducing the cost of gasoline by between 6 and 9 cents per gallon.

"The growing availability of ethanol across the United States is reducing the cost of gasoline by up to nine cents a gallon," said Brian Jennings, executive vice president of ACE. "While gas prices are still causing pain at the pump, ethanol is alleviating some of the pressure of hundred-dollar oil. Without ethanol, gas prices would likely be even higher."

And in Nebraska, ethanol is setting new records among motorists as the cost of gasoline edges higher.

According to the Nebraska Ethanol Board, Nebraska hit a record high in December as 77 percent of gasoline sold contained ethanol.

"Right now the price of gasoline is driving up the cost of everything," said Todd Sneller, administrator for the Nebraska Ethanol Board. "Ethanol offers battered wallets relief at the pump."

According to recent price reports by Axxis Petroleum and the Oil Price Information Service, ethanol for blending is selling for as much as 10 to 35 cents less than gasoline, depending on the market.

Factoring in the blender's tax credit, this means that the wholesale cost of E10 is between 6 and 9 cents less per gallon than gasoline, according to Ron Lamberty, ACE's vice president/market development.

"The price of gasoline isn't rising as quickly as the price of diesel, partly due to the fact that there's an alternative to gasoline ethanol that's adding more than 2 million gallons a day to our nation's fuel supply," Lamberty said.

According to this week's AAA fuel price report, the national average price of diesel reached $4.029 a gallon, while the national average price of gasoline remains at $3.26 for regular and $3.587 for premium.

In Nebraska, AAA reported the average price of gasoline with ethanol was $3.20 per gallon and diesel was running at a statewide average of $3.95 per gallon.

Jennings said oil companies are taking note of ethanol's blending economics.

Last week, he said, Marathon Oil Corp. announced that beginning in May, it will switch to an all-ethanol product slate at 16 of its Midwestern terminals, offering only E10 and no longer offering any unblended product.

ExxonMobil also announced a similar move, stating that beginning in May, the company is eliminating conventional gasoline at some of its terminals and moving to pre-blended E10 instead.

"We are pleased to see the oil companies recognizing the value that ethanol brings to consumers, and having both Marathon and ExxonMobil switch to ethanol at several of their terminals is a significant step in the right direction," Jennings said.

The U.S. now has the capacity to produce 7.9 billion gallons of ethanol on an annual basis, according to ACE.More than half of the nation's gasoline contains some percentage of ethanol, most as E10, the 10 percent ethanol blend approved for use in all makes and models of vehicles.

Steve Sorum of the Nebraska Ethanol Board said that in Lincoln, E10 is priced as low as 10 cents per gallon less than the price of regular gasoline.

"Given the factor that Nebraska is now seeing ethanol in 77 percent of its fuel, the savings to Nebraska motorists is significant," Sorum said.

That monthly savings is about $4 million per month.

With a new ethanol plant recently opening in Cambridge, Sorum said Nebraska ethanol plants are now producing more than 1.3 billion gallons of ethanol annually, using about 600 million bushels of corn.

With more plants coming on line this year and existing plants expanding, Nebraska ethanol plants could be using nearly 1 billion bushels of corn by the end of the year.