Ethanol, promoted for years as a cheap alternative to ordinary gasoline, suddenly isn't so cost-friendly.
E-10, which for years has been a choice at the pump, always has been a few cents cheaper than regular unleaded. Now, it's 5 to 10 cents more expensive, which leads to dismay for many of us who are witnessing massive expansion of the ethanol industry, but at the same time seeing ethanol prices on the rise.
Brian Jennings, executive vice president for the American Coalition for Ethanol, said the rise is because of a draining of the supply by points south and east of here. Cities and industries that formerly relied upon MTBE-blended fuels -- which are more prone to pollution, according to the ACE -- have been switching to ethanol.
That's good for the ethanol industry, but it also has reduced ethanol stores. Until those tanks can be refilled, it's likely higher prices will continue for ethanol-blended gas.
We have been led to believe that ethanol is a cheap, and clean, alternative to regular gas. The ethanol industry for years has promoted that and many have bought into it.
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Jennings said this week that spending so much time promoting ethanol as a cheap alternative may not have been the industry's best strategy. Instead, he said, the argument should be made that ethanol is homegrown, benefits the Midwest's agriculture industry, promotes cleaner air and helps America break its dependence on foreign oil.
Too late. Most of us fell for the cheap alternative angle, and can't hide our disappointment when we see that E-10 now tops $3 per gallon, even as regular unleaded hovers around $2.95.
In defense of ethanol, however, it would be fair to say that Jennings feels the industry will probably soon catch up with the rising demand. He said 25 new plants will come online nationwide by the end of this year, including the one under construction in Loomis, just north of Mitchell.
When those plants are up and running, Jennings feels ethanol-blended fuels probably will retake their place as the cheap alternative to regular gas.
We hope so.
Ethanol has given a needed boost to South Dakota's agriculture industry. It has prompted construction of numerous facilities that not only are expected to provide a better market for our ag producers, but also will add to the tax base of the areas in which they are built.
But to see ethanol-blended fuels bypass regular fuels on the price list tempers, somewhat, the general public's enthusiasm.
