E-15 Is Not The Answer To High Gas Prices

In a recent tweet, President Biden announced a measure to help relieve high gas prices. The vast majority of American drivers are still using gasoline or diesel to get around, do work, and bring all the goods and services they need, so on the surface it seems like a great idea to do anything we can bring price relief.

But is this something that would actually help people save money on gas? To answer that, we need to take a deeper look.

Some Historical Background

Ethanol has a long history as an automotive fuel, even predating gasoline in some ways. Coal, usually used to make steam, was the fuel of the industrial revolution. It was used for everything from powering factory machines to moving goods and people on ships and trains. Steam power, a type of external combustion, isn’t practical for individually-owned vehicles, though, as it required advanced action to get boilers heated up. On top of that, some countries banned the use of steam engines on roads.

Internal combustion engines had been in development during the nineteenth century, when steam power was still dominant, but they weren’t fueled by gasoline. Gasoline existed, but only as a byproduct from making kerosene for lamps, and nobody really thought to do anything but dump gasoline in rivers to get rid of it. As a byproduct, it really wasn’t of very high quality, and engines of the time couldn’t handle that. So, early internal combustion engines generally ran on alcohol, and one of the easiest alcohols to get in reasonable quality was usually ethanol.

When personal vehicles proliferated, steam power just wasn’t a good option, an opening for electric and internal leaving combustion vehicles to take over for land transportation outside of railroads. At the same time, the quality of gasoline improved, providing cheaper fuel that was already being made as a byproduct of kerosene, making its widespread availability possible during a time when electricity was not widely available in rural areas. The final nail in the coffin was the electric starter, which made it a lot less troublesome and dangerous to use a gasoline engine.

But the ability to make alcohol fuels from things like corn or sugar cane didn’t go away. When MTBE, an oxygen additive meant to reduce pollution, was shown to be contaminating groundwater, an alternative was needed. This lead to the adoption of E10 fuel, or fuel that’s 10% ethanol and 90% gasoline. Ethanol has high octane, allowing for lower grade gasoline to be used in such blends, further saving money. But, ethanol also has lower energy content, which reduces an engine’s efficiency per gallon of fuel.

The last time ethanol came up as a serious option was during the War on Terror, with E85 “flex fuel” capable engines becoming more common. The advantage was that fuel could be mostly sourced from something other than oil, helping push the United States closer to energy independence from oil sources in Southwest Asia. The downside is that E85 means a lot less energy content, leading to much lower efficiency (lower MPG). Sometimes, the savings of E85 fuel was enough to more than make up for the lost efficiency. Other times, the price was cheaper, but not cheaper by enough to justify the efficiency hit, meaning the effective price per mile was deceptively higher.

People could use E85 price/efficiency calculators, like this one, to determine whether E85 was worth it, but most people didn’t bother with all of this (especially before smartphones became common).

E15 Would Ultimately Have A Small (or No) Impact On Oil Imports

If every gas station everywhere switched from commonly sold E10 to E15, this would reduce the amount of oil used by 5%. This wouldn’t have a big impact on prices, but everyone isn’t going to actually buy E15, so the impact would be smaller.

One problem that will lead many people to not buy E15 is that it isn’t as good for engines. Many newer vehicles have fuel systems that could handle it, but some manufacturers recommend against anything beyond E10 in their vehicles. Among the remaining vehicles that technically can handle E15, many owners will think it’s risky, and will try to avoid purchasing the fuel, instead seeking out E10 fuel or fuel without any ethanol content at all (which is available). This will put a dent in how much of a price impact E15 fuels could have.

Another thing that will keep drivers from saving money is deceptive advertising. If the E15 fuel is cheaper to purchase, some station owners and distributors will keep a cut of the savings. This will work because drivers will still think they’re getting a good deal, as the price at the pump is in fact lower. But when you consider the lower efficiency (about 3%), there will be times that drivers are paying less per gallon, but are actually paying more per mile for fuel.

So, the savings might just get eaten by people in the fuel supply chain instead of getting sent along to drivers.

The Downsides

While drivers won’t save much, and will sometimes get fooled into paying the same or a little more, that doesn’t mean that it’s a breakeven proposition. There are good reasons to stay away from non-fixes like E15.

The biggest problem is that any savings from using more ethanol is artificial. Ethanol is only cheaper because it’s heavily subsidized by the government (which creates other problems I’ll get into in the next paragraph). Ultimately, any savings are paid for somewhere else (either by taxes or inflation) to come up with the money for corn farmers and ethanol producers. So, no money is really going to be saved in many households.

The other problem is that corn is not a great place to get ethanol. When US farmers don’t sell their corn to people who will eat it, someone else has to grow the food elsewhere. To make room to grow the food, forests are sometimes sacrificed, leading to increased carbon emissions and less carbon uptake. Ultimately, the greenhouse gas emissions turn out to actually go higher instead of being lower. So, the price for saving a few cents (or not) at the pump is worse than just burning gasoline.

Finally, there’s the problem of opportunity costs. When money and time is wasted on non-solutions like E15, it gives people false hope that gasoline-powered cars are going to be a viable long-term solution instead of looking for better alternatives, like hybrids, plugin-hybrids and BEVs. In the rush to find a short-term fix, we may ultimately be cannibalizing long-term fixes that actually work.

Featured photo by Fritz Hasler.


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