Letter - Put ethanol in all gasoline

Talk about it

To the editor:

Mr. President, how do you allow 113-octane ethanol futures to trade at $1.57/gallon on April 27, 2010? While 85-octane gasoline futures traded for $2.33/gallon or a 76/cent per gallon price differential? Yet U.S. consumers pay dearly for every pint of octane they buy.

Then how do you allow futures traders in Chicago to set or direct the ethanol price on volume of only 35 contracts or about 1 million gallons traded on that day? When government EIA data shows that the U.S. ethanol industry actually produces over 34 million gallons/day? Can you have Congress include this in their derivative hearings?

This price differential, combined with the ethanol blender’s credit of 45 cents/gallon, means the following:

For every 8,000-gallon truckload of ethanol entering a pipeline blending terminal, like here in Alexandria, someone in the fuel distribution system has an opportunity to profit from this combined $1.21/gallon lower ethanol price, compared to gasoline or almost $10,000/truckload. All while gasoline actually needs the ethanol to enhance the octane level to get to the consumer grade of 87-octane at the pump.

What is really disturbing about these market distortions are the drop in ethanol profitability and production, while gasoline prices and profits soar. These distortions actually lower the price of corn and threaten to end the boost ethanol economics have delivered to rural areas. All while consumers truly need this alternative fuel supply and clean air additive.

Mr. President, I would love to show you what the 45-cent per gallon blenders credit actually pays for. I’m a strong supporter of corn-based ethanol, as should all American consumers be.

It’s time to put 10 percent ethanol in all American gasoline just like we do in Minnesota and address rising gasoline prices for consumers with ethanol.

Alan Roebke

Alexandria, MN

Tags: alan roebke, opinion, letters, roebke