Here’s a great article from BusinessWeek Online on the ins and outs of Ethanol. It’s probably one of the best primers on the topic that I’ve seen, so I share it with you. Key paragraph:
Is ethanol cheaper than gas?
Surprise, surprise, it isn’t. The move this spring by more regions to use ethanol means that demand has spiked, driving up prices. On Monday, the New York harbor price was around $3 per gallon compared with about $2.28 for gasoline (before being mixed with ethanol). In other words, for now ethanol is helping to increase prices at the pump, not to push them down.
That being said, there’s no reason that can’t change in the future. Increased production and removal of the tariffs can help. I think Ethanol would be a great help to start diversifying our energy sources.