Ethanol Subsidies & Tariffs Finally End

I know, I'm a few days late on this, but I'm still trying to catch up. Gimme a break. I've been sick.

Now that government subsidies for ethanol have ended, as have the tariffs on Brazilian ethanol, what will the effect be fuel prices? In the end, probably not a whole lot. After all, ethanol is only 10% of the volume in E10 gasolines. Assuming Brazilian ethanol becomes more popular with blenders, you might see an approximate 5¢ per gallon drop in gasoline using it. For blenders using US corn ethanol, you might see an equivalent rise in price. But the main thing is that you and I and everyone else will be paying for it up front rather than having the cost of it buried by taxpayer funded subsidies (to the tune of $6 billion a year).

As many of you know, I am not a fan of gasoline/ethanol blend fuels. They cause too many problems, particularly in small engines (lawnmowers, snow blowers, chainsaws, etc.) and in marine use, where nominally humid conditions can cause the ethanol to settle out and clog the fuel systems of boats, something I've had to deal with over the past couple of years. And while the end of subsidies and tariffs are a good thing, that will not make me like the blended fuels. There are still too many downsides. (One of the 'benefits' of ethanol sold to us by the EPA was that it would make gasoline burn cleaner. And it does..for carbureted engines. But it has no effect on fuel injected engines other than decreasing fuel economy by 5%. This is a benefit?) Of course the EPA wants to boost the ethanol content in fuels to 15%, but so far the Congress has said “No”. Even Congress understands the downsides to such a move and the EPA has not shown the move will be beneficial to anyone but the EPA and ethanol producers.