cheap ethanol myth

Ethanol has to be cheaper as you use more of it. The four cents a litre compensates you for the loss in efficiency.


Fuel Economy

Fuel economy (miles per gallon) is directly proportional to energy content (see http://www.eia.doe.gov/cneaf/alternate/page/faq.html#12). Ethanol contains approx. 34% less energy per gallon than gasoline, and therefore gets 34% fewer miles per gallon (see http://www.eere.energy.gov/afdc/progs/ddown.cgi?afdc/FAQ/5/0/0; see also "Alternative Fuel Efficiencies in Miles per Gallon", http://www.eia.doe.gov/cneaf/solar.renewables/alt_trans_fuel/attf.pdf#page=39). For E10 (10% ethanol and 90% gasoline), the effect is small (~3%) when compared to conventional gasoline, and even smaller (1-2%) when compared to oxygenated and reformulated blends (see http://www.epa.gov/orcdizux/rfgecon.htm). However, for E85 (85% ethanol), the effect becomes significant. E85 will produce approximately 27% lower mileage than gasoline, and will require more frequent refueling. The actual performance may vary depending on the vehicle (see http://www.fueleconomy.gov/feg/byfueltype.htm).

The lower mileage should be considered when making price comparisons. For example, if regular gasoline costs $3.00 per gallon, and E85 costs $2.19 per gallon, the prices are essentially equivalent. If the discount for E85 is less than 27%, it actually costs more per mile to use. For USA price comparisons, see http://www.eere.energy.gov/afdc/resources/pricereport/price_report.html