Gas Prices Could Be Higher
Gas Prices Could Be Higher. I’m Greg Martin with today’s Line On Agriculture.
The price of gasoline is likely causing some sticker shock at the pump with some states now reporting prices over $4 a gallon. But the National Corn Growers Association points out the prices could be even worse if not for domestically produced ethanol. NCGA President and North Dakota grower Bart Schott says a number of studies have detailed how ethanol is keeping gas prices from getting even higher.
SCHOTT: You know if we didn’t have an ethanol blend the price of gas could be at 40 cents a gallon higher and up here where we’ve got blender pumps we’re seeing over a dollar a gallon difference between regular gas and E85 right now and so that is such a fun story to tell where the biofuels are really making an impact on the consumer when he fills his tank up.
Actually - it could translate to over 50-cents per gallon when considering that Merrill Lynch determined in 2008 that without ethanol - oil and gas prices would rise by 15-percent. Schott notes that adds up to real cash in the consumer’s pockets. What’s more - according to the Institute for Local Self Reliance - 75-cents of every dollar spent on biofuels recirculates through the local economy. On the other hand - 75-cents of every dollar spent on oil exits the local economy - and in most cases - the country.
SCHOTT: Most of this ethanol is produces in the rural areas and that’s been a real shot in the arm for the rural economy. A story I like to tell - over in Hankinson we have a 100-million gallon plant over there and it brought 50 some jobs into that small community. And these are high paying jobs that has really been a boost to that town and the surrounding towns.
Schott says it’s important to stop exporting American jobs and money. Throughout the country - ethanol supports hundreds of thousands of jobs. It also - in 2010 - displaced the need for 445-million barrels of imported oil - valued at 34-billion dollars. Despite that - ethanol’s critics point to ethanol as the reason for higher corn prices - and therefore - higher prices at the grocery store. Schott says NCGA has long used a box of corn flakes to demonstrate that producing our own fuel does not disrupt the production of our own food.
SCHOTT: Even is the cost of the corn went up 25% it would only increase the cost of that box of cereal by a dime.
That’s today’s Line On Agriculture. I’m Greg Martin on the Ag Information Network.
