As the U.S. struggles with gas prices that have soared skyward and just won’t seem to budge from a lofty national average that currently sits at about $3.81, the U.S. Department of Agriculture (USDA) is getting busy pointing out what it is doing to help break the country from its dependence on foreign oil and aid in providing some relief at the pump. While the U.S. Department of Energy (DOE) oversees much of the federal governments energy efforts, government assistance in the production of biofuels and biomass energy facilities often falls squarely in the court of the USDA. For example, earlier this year the USDA issued about $405 million in conditional loan guarantees for biomass refineries in Alabama, Mississippi and Florida. More recently, the USDA announced a $47 million round of funding for biomass crop research that involves 50,000 acres of land that will be used exclusively for dedicated energy crops.
Now, Agriculture Secretary Tom Vilsack is taking some time to announce a program aimed at heightening public awareness of the availability of E85 or “blender fuel” for those with flex-fuel vehicles and other cars capable of taking advantage of the fuel blend comprised of 85% ethanol. One of the USDA’s recent initiatives includes the Rural Energy for America Program (REAP) which will reportedly make funding available for flexible fuel pumps. It is hoped that the program will help encourage fuel station owners to invest the necessary capital to make E85 available at their fuel stations.
The USDA indicates there are currently 8 – 8.5 million flexible fuel vehicles on U.S. roads, which constitutes about 3.2 – 3.5 percent of the approximately 250 million vehicles on the road. These flexible fuel vehicles are designed to run off of E85. However, there are currently only around 2,350 fueling stations that offer E85 of the more than 167,800 stations nationwide. Earlier this year, the Environmental Protection Agency (EPA) released the results of E15 testing on vehicles years 2001 and younger. The EPA’s findings suggest there are more vehicles on the road that could take advantage of higher ethanol blends than currently available at local, non-E85, pumps.
Considering that the national price per gallon of E85 is currently $3.27 (about $.54 less than the average price for a gallon of regular unleaded gas) one might be led to think that the cost savings would be sufficient motivation to seek out those fuel stations that do offer E85. However, the price per gallon of E85 only tells part of the story. According to AAA, E85 has a lower energy content as expressed in British Thermal Units. This means that vehicles running on E85 get fewer miles per gallon than they do on the current 10% ethanol blend (E10) that is prevalent at U.S. fuel pumps. When this factor is taken into account, E85 actually ends up costing drivers about $.50 more per gallon on average than a gallon of regular unleaded.