Gas Prices and War
I’m Bob Larson. Gas and biofuel prices will go even higher amid conflict between Russia and Ukraine, but biofuel leaders argue that corn ethanol will still be cheaper than gasoline and able to meet demand. There’s no arguing that fuel prices go up during war …
COOPER … “If oil stocks and gasoline stocks tighten as a result of a conflict, yeah, that’s going to pull prices for all energy commodities higher, going to pull prices for things that can substitute for gasoline higher, and that includes ethanol.”
But Renewable Fuels Association chief Geoff Cooper argues the ‘flip-side’ of that coin …
COOPER … “But we fully expect that ethanol is going to remain at a discount to gasoline. As I said, we’re 50 to 60-cents cheaper today. We expect that to continue because the primary driver of ethanol prices is—believe it or not, it’s not oil prices—it’s corn prices. It’s what is our feedstock costing.”
So, if oil hits 100 dollars a barrel …
COOPER … “If you have a hundred dollar a barrel oil, ethanol producers can afford to pay more for corn and still make a margin and still deliver a product to the marketplace that is lower cost than gasoline.”
Which the biofuels industry argues is the key reason to boost the use of ethanol, including with higher blends, to expand the nation’s fuel supply and reduce price shocks from global events like war.
