Nebraska Ethanol Board

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News: 2014

Ethanol Saving Nebraska Motorists Millions

November 12, 2014

In recent weeks, falling gas prices have captured the attention of Nebraska drivers. While lower crude oil prices account for some savings, the greater savings are from Nebraska-produced ethanol blended with sub-octane gasoline at the state’s fuel terminals.

Between September 2013 and September 2014, 75.2 percent of the 840.7 million gallons of motor fuel sold in Nebraska contained ethanol. With the wholesale cost of ethanol blends averaging $0.295 per gallon below all-hydrocarbon blends from U.S. refiners, Nebraska motorists and businesses saved $187.5 million.

Ethanol blends are even more important since U.S. petroleum refiners announced a policy to terminate supplies of minimum-octane gasoline to Nebraska fuel terminals in September 2013.

“Petroleum refiners sell sub-octane fuel because they can squeeze more gallons out of each barrel of oil they process,” said Steve Sorum, Nebraska Ethanol Board project manager.

Instead of a minimum 87 octane product required by federal regulation, refiners now supply 84 octane fuels to eastern and central Nebraska terminals. In western Nebraska, where 85 octane is standard because of higher elevations, refiners supply 82 octane. This sub-octane gasoline is not suitable for sale to the public until ethanol is added to increase octane. Some marketers opt to increase the octane to legal limits by adding more expensive premium grades of gasoline. This process increases the price and toxicity of the final gasoline blend, said Sorum.

According to Sorum, this policy is now in effect across the country, so all motor fuel supplied to U.S. terminals must be blended with 91 octane premium-grade gasoline or 113 octane ethanol to meet federal regulations.

“U.S. ethanol production is a primary factor in the resurgence of domestic liquid energy production,” Sorum said. “Ethanol now accounts for more than 11 percent by volume of all motor fuels sold in the U.S. Along with increasing domestic crude oil production, ethanol is helping the U.S. approach the once seemingly impossible goal of U.S. energy self-sufficiency.”