We recently received a tip about E85 prices. The Ethanol Producer Magazine reader, an Illinois resident who asked to remain anonymous, said before Thanksgiving he found E85 priced at $2.99, compared to $2.79 for regular gas. &ldquo;This is clearly an attempt to malign and discourage ethanol,&rdquo; anonymous tipster said.
Of course, it&rsquo;s all over the news right now about dropping gas prices and OPEC&rsquo;s role in this. And it is true the spread between ethanol and gas is variable. Still, it&rsquo;s doubtful, even with the factors at play currently, that those prices are truly based on the wholesale cost of E85 vs. gasoline.
The oil industry has been known to price E85 ridiculously high, just because it can. In fact, we recently published a Renewable Fuels Association press release about a case study that showed evidence of <a href="http://www.ethanolproducer.com/articles/11520/new-rfa-case-study-shows-evidence-of-e85-price-gouging" target="_blank">E85 price gouging</a> in the St. Louis area during the summer driving season.&nbsp;The study found that the markup from wholesale prices on E85 was nearly twice the markup for gas and that E85 prices were about $1 higher than justified. The long and the short of it is that oil industry wins when consumers purchase more gas and less blends with higher ethanol content.
I emailed Robert White, vice president of industry relations for RFA, and he said this is happening all over the U.S. and he receives a few reports like this weekly. In order to track the &ldquo;good, the bad and ugly&rdquo; RFA launched the <a href="http://www.ethanolrfa.org/news/entry/rfa-announces-e85-post-your-price-contest" target="_blank">E85 post your price contest</a>, asking people to submit photos of E85 pump prices.&nbsp;&ldquo;We have received examples of each, with one station actually selling E85 for 85 cents per gallon more than unleaded long before gasoline prices dropped,&rdquo; he said.
The American Petroleum Institute and the Petroleum Marketers Association of America lobby Congress, claiming nobody wants to buy E85, but the untold story is how it is priced. &ldquo;I am sure it is possible to price nearly any product out of the market if you try hard enough, and they are indeed trying,&rdquo; White said.
In contrast to oil lobbyist talking points, White, points to <a href="http://www.ethanolproducer.com/articles/11698/protec-fuel-announces-launch-of-e15-at-2-florida-locations" target="_blank">two new gas stations that started offering E15 and E85</a> just last week.&nbsp;&ldquo;E85 quickly became (about) 20 percent of their sales, with E15 having similar results,&rdquo; he said. &ldquo;These blends will sell, if offered, and priced right.&rdquo;
Going back to the reader that emailed us, let&rsquo;s let him tell the rest of his story. He told me he has a hybrid vehicle, which is not a FFV, and was unable to find E15 where he lives. So he he stopped at a Thornton station with a blender pump in a town 20 miles away, when he happened to be driving through to drop off a friend. That&rsquo;s where the trouble started.
Although he found two pumps with five hoses, all that was offered was 87, 89 and 91 octane gasoline plus E85. The fifth hose label was blank and didn&rsquo;t work. &ldquo;I went inside the station and asked the person, who was not aware of it,&rdquo; anonymous tipster told me, adding that the gas station employee pointed out E85 was available.
Although anonymous tipster isn&rsquo;t a part of the ethanol industry (he works in information technology), he&rsquo;s a supporter of renewable fuels, he told me. &ldquo;It helps American farmers, reduces our nation's dependence on foreign oil and prevents the economic recessions triggered by oil price increase,&rdquo; he said. Here&rsquo;s an example of a consumer that wants to buy E15 and will put forth efforts to find it, but doesn&rsquo;t have access to the fuel. (He tried again when he traveled for Thanksgiving and encountered the same problems.)
Anonymous tipster believes a solution is for ethanol producers to sell E10, E15, E85 and other fuels at their own retail stations. And it is true that there are some ethanol plants that do sell fuel at on-site pumps. If that works for them, that&rsquo;s wonderful! It&rsquo;s always cool to hear about ethanol producers with successful strategies to get their product to customers.
But what I think is an even better idea is for<a href="http://www.ethanolproducer.com/articles/11033/on-site-rin-collection" target="_blank"> ethanol producers to blend onsite</a>, which means they can capture renewable identification numbers, known as RINs, and sell directly to retailers.&nbsp;I&rsquo;ve been particularly interested in this idea since last summer, when I heard Rick Schwarck, chairman, president and CEO of Absolute Energy LLC, one of the ethanol plants that does this, <a href="http://ethanolproducer.com/articles/10194/ace-conference-features-retailer-ethanol-producer-capturing-rins" target="_blank">speak about it at the American Coalition for Ethanol conference</a>.&nbsp;I hope to hear that more and more ethanol producers are doing this in the future.
Another way the ethanol industry is working to help expand retail offerings of higher ethanol blends is through the Prime the Pump initiative, which was announced at the International Fuel Ethanol Workshop. It&rsquo;s a three-year producer led marketing effort to help gas retailers add pumps so they can sell fuels like our anonymous tipster was looking for in Illinois.
The bottom line is that the industry is working to expand the number of retailers that offer E85 and mid-level ethanol blends. And the pricing issue is being paid attention to as well. There&rsquo;s a lot of work to be done and the ethanol industry is doing what it can to be a catalyst for positive change. &nbsp;

Big Oil isn't above stooping to dirty tricks to mislead consumers into thinking E85 isn't a good fuel to buy, including by trying to price the fuel right out of the market. 

E85 prices shock EPM reader

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