Fuel prices have just reached an average of $4 per gallon in the US, and wow, people are quite upset. The prolonged conflict with Iran continues, keeping the crucial Strait of Hormuz closed, resulting in a significant 20% of the world’s oil supply being cut off from global trade. But no worries, the EPA has proposed a solution to decrease prices: prolong America’s fuel supply by mixing in more affordable ethanol. What could possibly go awry?
Well, depending on the age or condition of your vehicle and your location, the outcome could be problematic. That’s what we’re exploring in this week’s edition of The Drivecast.
This is quite a divisive issue, so let’s clarify some details. Outside of specialized blends, the majority of gasoline sold in the U.S. already contains 10% ethanol (a corn-derived alcohol) as a standard mix known as E10—meaning each gallon of gas is composed of 90% gasoline and 10% ethanol by liquid measure. This mixing occurs because ethanol is an oxygenator that enhances combustion efficiency and increases octane rating. Once upon a time, we used lead, but… that didn’t turn out well.
In certain states, particularly in the Midwest, you can purchase what’s referred to as E15 gas, containing 15% ethanol and 85% gasoline, marked as 88 octane at the pump. It’s less expensive as you are literally getting less gasoline and more ethanol per gallon, but air-quality regulations limit its sale during the summer due to higher smog emissions compared to E10.
This is the focus of the EPA: waiving regulations to enable oil companies to continue producing E15 longer into spring and summer than they typically would, prior to the customary June stop. In theory, this means more of the cheaper ethanol-rich mix will be available for an extended time. However, E15/88 octane is only available at a limited number of gas stations across the country. So increasing supply won’t necessarily lower the price of regular 87, 89, 91, and 93 octane gasoline in the immediate future.
Even if it does, assuming more individuals opt for E15/88 leading to reduced demand for the other grades, a more significant issue arises. Ethanol also acts as a solvent that can degrade sensitive rubber seals and plastics in older engines, which could cause significant harm, a reason why it’s generally capped at 10%. The EPA advises against its use in vehicles manufactured before 2001, although that critical information is absent from the agency’s optimistic press announcement. Even in newer cars, E15 will diminish fuel economy since it’s less energy-dense than conventional gasoline.
So yeah. Don’t get your hopes up for this to resolve anything.
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Complete Transcript
Joel Feder: Wow, have you noticed those fuel prices? And when I say wow, I mean Kyle, who resides in LA where everything costs a fortune.
Kyle Cheromcha: Don’t remind me. I actually spotted $8 per gallon on a gas sign the other day. It’s hard to overlook that. It really makes you stop and think in a negative way. Yeah, it’s pretty painful out here.
Joel: Andrew, what are you seeing for prices in your area?
Andrew Collins: In rural New York, we’re finally hitting the $5 mark for 93 octane, which is uncommon here. Typically, it hovers in the $3 range at best, but it’s been a frightening few weeks for sure.
Kyle: I have little sympathy for that. None of this is satisfactory. It all stinks, but it’s somewhat heartwarming to see the rest of the country panic over $5 gas while we’ve been paying well over that in California for years. I feel like Bruce Willis in Die Hard, welcome to the party, pal. That’s where I’m at right now.
Joel: But you don’t understand. I live where it snows and it feels like negative 40 with the wind chill. I’m not supposed to be paying for that sunshine tax. I’m sure you pay a premium to live where it’s sunny.
Kyle: There are advantages, and numerous justifications for why everything is pricey in California, but that’s not the focus of today’s podcast. The focus is ethanol. So Andrew, give me a brief overview. What is ethanol?
Andrew: Ethanol is a type of alcohol produced from corn. It’s mixed with gasoline to boost octane levels. The ratings you see at the pump, from regular to premium, are improved with ethanol additions. It enhances cleaner combustion. We previously used lead, which was toxic. Then we used MTBE, which polluted groundwater. Ethanol is currently preferred because it’s widely available and made from a crop we grow extensively in America.
Kyle: That sounds good to me. So what’s the issue then?
Andrew: Ethanol has downsides; it’s less energy-dense than gasoline. So, as you increase ethanol content, both performance and efficiency decline. Additionally, it can damage older vehicles that lack sophisticated technology.
Joel: I must say, while there are drawbacks, there are also benefits. Many supercars and hypercars, such as the SSC Tuatara and others, run on ethanol, mainly E85. Although it’s less energy-dense, it offers a higher octane rating, results in better cooling, and is more oxygen-rich, enabling manufacturers like SSC to adjust their engines for better performance.
For instance, an engine that produces 1,000 or 1,200 horsepower on 91 premium fuel could produce 1,700 or 1,800 horsepower on E85 just by recalibrating the tune. It’s all managed by the ECU and the control units that monitor the octane and the fuel mix.
Andrew: Moreover, GM has developed flex-fuel engines that are designed to use E85, which were designed for efficiency and cost effectiveness in times of high gas prices. So they adapted their engines for higher ethanol use, and come 2026, that design may appear more appealing.
Kyle: This is where confusion arises for many people because you mentioned that we have E85 fuel available in the country. At least in some states, you’re likely to see it alongside octane ratings like 87, 89, 91, 93. People may not realize that E85’s octane rating is usually around 100 or 105. This indicates a general lack of consumer knowledge concerning gasoline and octane ratings.
Andrew: For the average consumer, the ethanol content of fuel is rarely a consideration. Apart from E85, which is clearly labeled, the ethanol content for other grades tends to be overlooked. In the U.S., all octane fuel is usually E10 with 10% ethanol. This is the norm. From October to May, oil companies can sell E15, which has 15% ethanol, as it is cheaper. Essentially, they are diluting gasoline with corn juice to reduce costs. This leads to the waiver we are discussing, where the EPA is extending the sale period of E15 by about a month, allowing more of what’s sometimes deemed winter gas to creep into summer.
Kyle: Right. Although 10 to 15% might not seem significant, it amounts to a 50% increase in ethanol in each gallon of gasoline. As you noted, most consumers don’t consider this since blending occurs at refineries and the fuel arriving at the gas station is just what they can purchase. There’s little awareness of the blending process and how it affects octane ratings—if they even think about octane ratings at all. So what’s really happening with this waiver? You’ve mentioned the distinction between summer and winter gas. Why is ethanol typically not sold during the summer, and what is the EPA aiming to achieve?
Andrew: The EPA’s objective is to lower regular gasoline prices at the pump, theoretically observable. E15 can be as much as 25 cents per gallon cheaper than E10, which is a substantial saving when refueling. Ethanol evaporates quicker in heat, leading to increased smog, which is why it’s typically restricted during hot conditions. However, some corn-producing states are allowed to sell it year-round, while others do not sell it at all.
Therefore, due to the standard June cessation, oil companies reduce E15 production in May. Many assume gas prices rise in summer due to heightened demand, but this is also a contributing factor. Each gallon contains more gasoline in it, meaning it’s less diluted. With gas prices climbing and global supply affected by conflict, the EPA’s waiver allows oil companies to keep producing E15 longer into May. Another crucial element of this is eliminating boutique fuels, which we can discuss shortly.
Kyle: So essentially, more ethanol leads to cheaper gas. I believe that when most people hear this, they think, “Great, sounds beneficial.” But why is this problematic? Why should people be aware of it?
Andrew: More ethanol results in cheaper gas, but it comes with some trade-offs. Because it’s less energy dense, you need to use more of it to keep your vehicle running effectively. There are varying reports on what this reduction in fuel economy actually is. The EPA suggests you should anticipate roughly a 1.5% drop when switching from E10 to E15, but sources like Cars.com and Car and Driver suggest it’s closer to 4 to 5%.
Joel: There are many factors at play as well. Certain engines, like turbocharged versus naturally aspirated, and environmental conditions influence efficiency. Plus, you’ll likely refuel more frequently because of diminished fuel economy. So, while you might save during refills, you’ll consume more fuel overall. It’s hard to pinpoint where the real savings lie; it becomes a bit circular.
Kyle: People might hear about a 5% efficiency drop and dismiss it, but that can add up over time. For instance, driving a thousand miles with a 5% reduction means you’re losing out on 50 miles, which is considerable.
Andrew: What has particularly caught my attention regarding this topic is the issue of wear. Since this fuel contains more oxygen, it leads your engine to operate with a leaner fuel mix, which is not ideal. A lean condition occurs when there’s excessive air and insufficient fuel in the engine mix. Vehicles with high-performance engines, particularly those with high compression and turbo systems which many of our readers might use, are at risk when exposed to higher ethanol levels. The engine’s ECU will detect the increased oxygen and think that there’s a lean condition, prompting it to inject more fuel to avert knocking or pinging.
Additionally, not every ECU will calibrate perfectly. The EPA claims to have conducted six million miles of testing, concluding that cars made after 2001 typically won’t face issues with E15. However, the specificity of their findings is quite vague. Even if modern vehicles can use it, they are still under increased strain, requiring more from their engines and ECUs due to the leaner mixture of fuel.
Joel: Furthermore, what qualifies as a modern vehicle? The average car on the road today is around 11 to 12 years old. Without going into details, let’s estimate it at 11.5 years. What defines a modern car? If that is the average and considering the bell curve, many cars on the road are older than 11 years.
Kyle: Absolutely millions. So, what’s the concern with pre-2001 models? Is it merely that they are less advanced, or is there more to it?
Andrew: They are not only less advanced, but the materials used in older vehicles are also a factor. Ethanol, being an alcohol, is a solvent that can corrode seals and even certain types of aluminum. This especially impacts very old cars and smaller engines. Anything with a carburetor or rubber components is at risk since ethanol can leave residue and gum up carburetors easily. It’s detrimental to your older vehicles.
Joel: I would even argue that it’s problematic overall because ethanol is unstable over time. Unlike gasoline without ethanol (known as non-oxygenated gasoline), oxygenated fuel is less stable. For cars that aren’t driven daily, or for home power equipment like two-stroke gas blowers and lawnmowers, this gasoline isn’t shelf-stable like non-ethanol fuel.
Andrew: That’s certainly one of the main points consumers should remember: be extremely cautious when selecting fuel for your lawnmowers, boats, and go-karts, especially around March when they typically come into use. Those engines will not function well on E15; you need to be careful.
Kyle: Exactly. If you fill up with one tank of E15 and your vehicle isn’t accustomed to it, or if you have a pre-2001 vehicle, significant damage could occur. A single tank may not wreck your vehicle unless seals are already deteriorating. However, in small two-stroke engines found in lawnmowers, motorcycles, or boats, the damage can manifest much faster due to how these engines operate. Moreover, as Joel mentioned, the stability of this fuel is poor. When filling up your container early in the summer and refueling your mower every few weeks, by July, particularly in warmer climates, that gasoline may have degraded significantly, resulting in substantial issues. Even if a lawnmower doesn’t carry the weight of a car, it can still present many challenges.
When it comes to highway driving compared to regular driving, should any specific concerns be addressed?
Andrew: Generally speaking, highway driving tends to cause fewer issues, including with this specific matter. Vehicles that maintain a consistent speed are typically more content than those with fluctuating throttle positions and speeds. Thus, if highway distance driving is more common for you, this topic becomes less of an issue.
Kyle: Let’s get into where this fuel will actually be available. Not every state sells E15, but for those that do, consumers should be aware of an important detail at the gas pump. This E15 gas will be identified with an octane rating of 88. Therefore, at the pump, you will see options like 87, 88, 89, 91, 93, depending on the state—though not every state offers the 93 octane option. Thank you, California.
However, the 88 octane is superior to 87 in terms of performance. You might perceive that as upgrading your fuel, as many people do when selecting a higher-grade fuel that isn’t necessary for their vehicle. Yet, as we’ve discussed, opting for 88 merely because it’s available and possibly cheaper may lead to consequences. That could end poorly for you.
Andrew: There’s a fuel termed unleaded 88, which is usually how E15 is marketed. Ethanol content rarely gets its own label at the fuel pump, but that’s what you are referring to when noting unleaded 88. The ethanol adds to the octane rating, and octane ratings relate to preventing knock and ping in engines, which adds a layer of complexity when referring to this fuel at pumps.
Kyle: And Joel, prior to recording, you were recounting an instructive experience about why opting for the cheapest gas is unwise — something many people are aware of, while others may not be. Many think, “Gas is gas; my car works fine with 87, even if it takes 93.” What’s the risk involved here?
Joel: While gas may seem similar, the significance of octane ratings, like the numbers 87, 88, 89, 91, and 93 on pumps—which includes race fuel at 101—are critical as they reflect how your engine is calibrated to run regarding timing and compression. If you use lower octane fuel than your vehicle requires, it’s a problem. For instance, if you have a BMW or Audi that mandates 91, and you fill it with 87 non-premium gas, your vehicle will operate, but that’s a big “probably.”
Initially, it may run fine, but there’s a significant emphasis on the potential for issues. It won’t perform at an optimal level. The electronic control unit (ECU) and a series of sensors monitor the fuel mixture and adjust the engine accordingly. This means if your vehicle lacks the high-grade fuel it requires, it cannot function at peak performance, resulting in adjustments to timing, compression, and burning efficiency will modify everything surrounding it. It may still run but, one day, it may fail catastrophically without clear signs.
For example, in 2011, another journalist with a second-generation Cadillac SRX, equipped with a 2.8-liter turbo V6, required premium fuel but the journalist used regular. While it “should” be fine, it resulted in a catastrophic engine failure when the sensors and ECU failed to adapt correctly, leading to significant engine damage. This vivid lesson remains with me. My wife’s 5.7 V8 Hemi in her Grand Cherokee requires 89 octane, which is somewhat unique. It’s a blend of 87 and 91, and many stations don’t stock it. After purchasing the vehicle, I explained the rare but potentially catastrophic failure to my wife and advised that when a gas station doesn’t carry this blend, she should opt for 91 octane instead since the extra cost could serve as an inexpensive safeguard against rare instances of severe engine damage.
Kyle: That’s the insurance against risks right there. Plus, your story highlighted that this was a new car.
Joel: Indeed, it was a brand-new vehicle, probably with merely 5,000 miles on it.
Kyle: And while this discussion isn’t specifically about octane but ethanol content, it’s important to recognize that despite being from 2011, one could think their vehicle should be fine. But problems can arise regardless of vehicle age. The probability is lesser in newer cars, naturally, but engines are intricate machines with interdependent components; any small oversight might cause compensatory actions in another area, leading to engine failure when using unsuitable octane fuels. This scenario may be uncommon, but it’s certainly possible.
The key point is that while one octane difference might seem trivial, its implications can be significant, particularly since that octane disparity of 87 to 88 or 89 to 88 also brings a lot more ethanol into the mix that could be very harmful to engine performance.
Ultimately, many people are concerned about whether this will actually be effective in reducing prices. Andrew, what’s your take?
Andrew: The short answer is yes, 88 octane is less expensive. That’s a given.
Kyle: As long as you reside where it’s accessible.
Andrew: Yes, exactly. That’s a valid point. This won’t lower prices for everyone; it will make regular gas cheaper for a select few. However, the actual benefits for consumers are challenging to quantify accurately because, as mentioned, it reduces your efficiency slightly. I imagine that the primary beneficiaries here are the oil companies, who will find their refining processes simplified. They previously had to produce various fuel types for different geographic markets, and now they can adopt a consistent gasoline pool nationwide. This streamlining removes much labor from the refining process. Whether this will lead to consumer savings or if they will pocket those profits remains to be seen.
Kyle: It’s worth noting that California legalized E15 for year-round sales just last October, responding to high gas prices—an issue we’ve been facing here for many years. Yet prices in California remain the highest in the nation. It’s still not widely available, and we lack the refinery capacity for it. This emphasizes a crucial point: this could help if you’re in an area where E15 is already offered. It could increase supply and be available longer. However, if not, this solution won’t just magically show up at your nearest gas station.
Additionally, regarding mileage, if you spend extra time searching for E15, the potential savings could be negated by poor efficiency and the fuel scarcity leading to longer driving distances. The arithmetic really does not favor the average consumer.
Joel: The bottom line is that with increased ethanol in our gasoline, expect to frequent the pump more often. You might save a few cents at the pump, but your milage will likely drop; thus, you may end up filling up more frequently. Whether you experience savings at the pump or not, if you’re refueling more often, it’s unclear. Depending on your efficiency losses, you might not be saving anything at all.
Moreover, I question the necessity of this entire approach. How much oil are we actually missing out on due to the conflict? My perspective is that it all sums up to midterms approaching and rising fears that the media is portraying unfavorably. To summarize, the headlines are alarming; with elections nearing, there’s a clear issue to confront.
Kyle: Indeed, around 20% of the world’s oil passes through the Strait of Hormuz, which is currently obstructed and doesn’t appear likely to reopen soon. We’re recording this on a Monday, so we’ll have to see how the situation unfolds in the next couple of days before this is aired. However, as one of the largest oil producers globally, it stands to reason that we could manage our oil supply during this period. We could also tap into our strategic petroleum reserve to alleviate pressure. Numerous complex factors influence gas pricing at the pump, and the oil companies’ profit motives are but one of them. Supply issues make a difference too.
In the end, I doubt this will have a substantial impact. As you mentioned, it will create a positive headline stating, “Gas prices drop 20% in specific areas for certain fuel types.” Yet, for the vast majority, savings will likely be nonexistent. If you opt for E15, keep track of your fuel economy. The built-in MPG calculators in cars aren’t always precise; the best approach is manually measuring the volume of fuel at the pump and tracking your mileage until it reaches a designated point to calculate your true miles per gallon. It’s bound to drop when using E15 or 88 octane fuel; the real question is how much, varying based on your location, driving habits, vehicle efficiency, and other factors. Stay alert, evaluate your situation, and feel free to reach out to us with your findings—we’re eager to hear your experiences too.
Joel: On that note, to genuinely track this, as Andrew smiles because he doubts many will take this step, you need to be consistent about using the same pump, not just the same gas station. Different pumps and gas stations can have varying calibrations, changing how much fuel actually goes into the car. This plays a role in the back pressure during refueling. If you’re switching between different stations, it may lead to discrepancies in your calculations—so be mindful of that because you’re trying to determine fuel consumption accurately over time.
Kyle: And for those who like to top off their tanks thinking it’ll provide them with extra fuel, don’t do that. Regardless of the fuel type, let it click off on its own and drive off without overfilling.
Joel: Do you know that fuel expands due to vaporization? When you attempt to top off, filling the fuel neck can cause gasoline to spill out as the gas expands, resulting in waste. You might think you are being clever, but the reality is that letting it stop after the first click is sufficient. Maybe try going for one or two more clicks, but just stop there.
Kyle: The system isn’t designed for you to outsmart it.
Joel: Regardless, you’ll be spending money, whether it’s for ethanol or gasoline. It’s all a necessary expense. You’ll end up using it.
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**Federal Authorities Assert Ethanol Fuel Blending Will Lower Gas Prices, Yet Doubts Persist**
In recent statements, federal authorities have claimed that augmenting the blending of ethanol into gasoline could result in decreased gas prices for consumers. This assertion arises amidst ongoing unease regarding climbing fuel costs and the effects of unstable oil markets on the economy. Nevertheless, doubts linger among industry professionals, economists, and consumers concerning the genuine efficacy of ethanol blending as a remedy for high gas prices.
**Grasping Ethanol Blending**
Ethanol, a renewable fuel primarily derived from corn, has been incorporated into gasoline for several years as part of initiatives to diminish greenhouse gas emissions and foster energy independence. The most prevalent blend is E10, comprising 10% ethanol and 90% gasoline. More aggressive blends like E15 and E85 contain higher concentrations of ethanol. Federal representatives maintain that increasing ethanol usage can aid in lowering prices at the pump by offering a cheaper alternative to conventional gasoline, particularly when oil prices soar.
**The Federal Viewpoint**
Advocates of ethanol blending, including officials from the U.S. Department of Agriculture and the Environmental Protection Agency, posit that enhancing ethanol production can stabilize fuel prices. They argue that greater domestic ethanol production can lessen reliance on imported oil and mitigate the repercussions of price jolts resulting from geopolitical unrest or natural calamities affecting oil availability.
Furthermore, the federal government has enacted policies to incentivize ethanol usage, including subsidies for corn growers and benefits for fuel producers to integrate more ethanol into their gasoline. These initiatives aim to support the agricultural sector while promoting a clean energy resource.
**Skepticism and Concerns**
Despite the hopeful outlook from federal officials, skepticism is widespread. Critics contend that the link between ethanol blending and gas prices is more intricate than it seems. Various factors contribute to this skepticism:
1. **Market Forces**: Gas prices are impacted by a complex interplay of global oil supply and demand, refining capabilities, and geopolitical elements. Ethanol blending may not vastly influence these variables, especially during periods of high crude oil prices.
2. **Production Costs**: While ethanol is often presented as a more economical option, its production and transportation costs can vary. Occasionally, when corn prices surge due to droughts or other agricultural issues, the costs of ethanol production can rise, potentially neutralizing price advantages at the pump.
3. **Consumer Attitudes**: Some consumers are concerned about the performance outcomes of higher ethanol blends in their vehicles. Ethanol can diminish fuel efficiency and may not suit all engines, causing hesitation toward embracing higher blends like E15 or E85.
4. **Environmental Consequences**: While ethanol is viewed as a renewable fuel, its production brings along environmental repercussions. Opponents underline the land use transformations, water usage, and fertilizer runoff linked to corn cultivation, raising concerns about the broader sustainability of increased ethanol production.
5. **Economic Practicality**: The long-term economic soundness of ethanol as a fuel source is questionable. With advancements in electric vehicle technologies and alternative fuels, some authorities argue that investing in ethanol may not be the optimal approach for addressing future energy demands.
**Conclusion**
As federal representatives promote increased ethanol blending to lower gas prices, the skepticism surrounding this strategy underscores the intricacies of the fuel market. Although there are potential advantages to expanding ethanol use, it’s crucial to recognize that gas prices are influenced by numerous factors beyond the fuel blend itself. As consumers and policymakers navigate these complexities, adopting a balanced approach that considers both economic and environmental ramifications will be vital in shaping the future of fuel within the United States.