Fuel costs for Americans are inflated due to the low energy content of ethanol, and also by the high costs faced by fuel companies trying to comply with ill-conceived fuel regulations, such as the need to buy Renewable Identification Numbers (RINs) if they have not blended sufficient ethanol into gasoline.
The Congressional Budget Office found that raising the mandated use of corn ethanol results in higher fuel prices.The Renewable Fuel Standard forces refiners to blend ethanol into gasoline or purchase sufficient RINs to comply with the mandate This increases the cost of gasoline due to ethanol’s lower efficiency and the cost of RINs. Due to ethanol’s corrosive properties and affinity for water, consumers need to avoid using ethanol blends in boats, lawn mowers, and small engines.
U.S. ethanol facilities use about 40 percent of the total U.S. corn crop, according to the Department of Agriculture. Corn use for ethanol has more than tripled since 2005 when George W. Bush enacted the Renewable Fuel Standard, which forces refiners to blend biofuels into transportation fuels.
The EPA sets annual and generally increasing quotas for conventional renewable fuel (usually corn-based ethanol), advanced ethanol alternatives made from non-edible material, and biodiesel. Ethanol now accounts for over 10 percent of U.S. gasoline usage—an increase from less than one-tenth of 1 percent in 1993.
The United States produces its ethanol from corn. Brazil produces ethanol from sugar cane. Corn has a lower ethanol yield than sugar cane. Ethanol also yields about a third less energy per gallon than gasoline, so fuel economy falls with ethanol usage.
Higher ethanol blends such as E15 (15%) sell for lower prices relative to E10 (10%) because the price of ethanol is lower than gasoline blend stock. E15 is currently sold for 3- to 10-cent/gallon less than E10, or 87 octane no ethanol blends, in most markets.
On May 31, 2019, the U.S. Environmental Protection Agency (EPA) issued a final rule allowing the year-round sale of motor gasoline blends containing up to 15 percent ethanol (E15) and thereby increasing the availability of E15 blends in the United States.
Before that rule, E15 was not sold during the summer months, defined as June 1 to September 15, to limit evaporative emissions that contribute to ground-level ozone. Most motor gasoline sold in the United States contains up to 10 percent ethanol (E10). Without this rule, a small amount of ethanol would added to gasoline as an oxygenate, creating a cleaner burning fuel and raising the octane rating of regular gasoline, which is useful for higher compression engines.
E15 is available in 30 states at about 2,000 gas stations. Although most new fueling stations have installed E15 compliant equipment, older stations that are just E10 compliant may need to install new equipment to accommodate the more corrosive nature of E15 gasoline blends. Retrofits may be cost-prohibitive.
Ethanol is corrosive to rubber and certain metals. It can damage the fuel lines of boats, lawnmowers, and other small engine equipment. Ethanol also attracts and bonds with water from the air, and that water can separate inside a fuel tank. It can eventually form a brown goo that can clog pumps and filters.