The White House’s Year-Round E15 Gas Plan Probably Won’t Save Us Money
Gas with a higher ethanol content is cheaper, but the MPG losses almost entirely offset the cost cuts.
On Tuesday morning, the White House declared plans to allow the year-round sale of E15 gasoline, or gas with a 15 percent ethanol content. According to the Executive Branch, this will increase our nation's fuel supply, bringing down eye-watering gas prices and contributing to American energy independence. Do the math yourself, however, and you'll find the Biden administration's claim that this will "lower costs for American families" probably isn't true. In all likelihood, the mile-per-gallon losses of high-ethanol gas will more than outweigh E15's touted cost savings.
In response to what the White House calls "Putin's Price Hike," the Environmental Protection Agency plans to issue a national emergency waiver allowing the sale of E15 gas this summer—a lift previously pursued by the Trump administration. Normally unavailable in most of the country from June 1 to September 15, E15 (sometimes known as winter blend) is not sold in hot weather due to Reid Vapor Pressure limits, as the fuel can contribute to smog. Because the ethanol in E15 is often produced from heavily subsidized corn, however, it tends to be cheaper than pure gas, which is why the White House claims "E15 can save a family 10 cents per gallon of gas on average, and many stores sell E15 at an even greater discount [...] that will add up to real savings."
Ethanol, though, has a variety of problems as a fuel, chief among them being energy density. According to APS Physics, gasoline has an energy density of 34.6 megajoules per liter (MJ/l), whereas ethanol comes in at only 21.1 MJ/l—just under 61 percent as much potential energy per liter. That reduces the actual energy per gallon of gas blended with ethanol, leading to decreased gas mileage that the EPA itself acknowledges can be up to five percent with E15. Crunch the numbers yourself, however, and you'll find that E15's lower energy density amounts to a loss of over 1.5 mpg for the average American vehicle (which gets 25.7 mpg as of 2020). That adds up to an approximate 6 percent increase in fuel consumption, which the numbers suggest the White House's trumpeted 10-cent-per-gallon savings don't offset.
As of April 11, the average price for a gallon of gas nationwide was $4.09, according to the Energy Information Administration. Take $0.10 off of that for E15, for $3.99 a gallon, and it'd cost a vehicle running the corn juice $4.24 in fuel to travel the same distance it would on a gallon of pure gasoline. (Note that pure gas isn't always available, and up to 10 percent ethanol content is legal year-long, nationwide.) So, even with that discount, fueling with E15 at current gas prices could actually increase per-mile fuel costs by almost 4 percent.
In the interest of fairness, the White House says discounts could merely start at $0.10, while broader availability of E15 could indeed reduce petroleum consumption, and thus prices. On its own, though, that probably won't reduce the price of gas (and thus E15) enough to reach the cost-per-mile break-even point. By my estimate, $0.10 savings per gallon only reach cost-per-mile parity with gas at approximately $2.60 a gallon. Short of another lockdown, it's hard to imagine gas getting that cheap again for a long time.
This isn't to say E15 is the Work of the Devil, as ethanol's higher octane offers distinct advantages for cars designed to exploit them. Flex-fuel vehicles can take advantage of even higher concentrations of ethanol, such as E85, which offers benefits for high-performance cars. To most American drivers though, E15 won't be worth the money, especially if it's used in cars that predate 2001 and aren't safe to use with the stuff. That goes for small engines too, like those in motorcycles, lawnmowers, watercraft, generators, and so on.
In summary, ethanol isn't an effective solution to high fuel prices, and it can't even claim an aggregate environmental benefit, according to a study published in February. More than anything, this comes across as a play for political favor in corn-producing electoral battlegrounds such as Iowa, Minnesota, Nebraska, Ohio, and Wisconsin. It only more strongly resembles that in the light of the White House's release declaring the USDA would set aside $700 million for biofuel this month.
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