Ethanol Study Reveals savings at the pump for South Dakotans

If you want to save money at the pump the solution is pretty simple: E-10. South Dakota drivers using a 10 percent ethanol blend (E-10) saved 11.1 cents per gallon at the retail pump over a 12-month period ending in March 2008. That’s the result of a study by a national firm published today by the South Dakota Corn Utilization Council (SDCUC).

The study, IMPACT OF ETHANOL ON RETAIL GASOLINE PRICES IN SOUTH DAKOTA , done by LECG, was a South Dakota-specific analysis of the impact of ethanol on retail gasoline prices.

What if every South Dakota driver had fueled up with the E-10 blend? South Dakota drivers used 429 million gallons of gasoline from March 2007 to March 2008 (an average of 35 million gallons per month). If all of this gasoline had been blended with ethanol at a 10 percent level, South Dakotans would have saved $47.6 million. This amounts to $164.10 for each of South Dakota’s 290,245 households.

Reid Jensen, president of the South Dakota Corn Utilization Council, says this is more positive news for the ethanol industry in South Dakota.

“Our industry is a major contributor to the state’s economy,” Jensen said. “Now we see that using ethanol brings a direct benefit to South Dakota motorists by lowering the price they pay at the pump. Just think what an extra $164 dollars in consumers’ pockets could afford them today.”

For retailers like Brent Bosch, General Manager of Sunshine Foods in Sioux Falls, an extra $164 for each South Dakota household makes good economic sense.

“This would be like an economic stimulus plan for the state. I’m a big supporter of ethanol, both for what it does for the agriculture economy, but just as importantly what it does for the economy of main street business throughout South Dakota. This study adds it up effectively. The more E-10 we put in our tanks, the more money we save, and the better off we all are.”

The author of the study, John Urbanchuk, who is a Director of LEGC, LLC, further found that “Increased use of ethanol will continue to save money for South Dakota drivers over the next decade; the size of the savings will depend on the pattern of gasoline and ethanol prices.”

The savings from the use of E-10 were estimated using actual monthly gasoline prices for South Dakota and ethanol price data. Ubranchuk concludes that ethanol, when used in an E-10 blend “provides South Dakotans with a high quality gasoline and saves money for consumers at the pump. …”

“Corn growers and the ethanol industry want to continue to make positive contributions to South Dakota’s economy both in economic growth through the industry and pocketbook savings for consumers,” said Jensen, who is a corn producer from Burbank, S.D. “This study quantifies the impact ethanol has on retail gasoline prices. It’s a clear win-win for everyone and as consumers gain access to higher blends of ethanol, the savings will grow exponentially.”

To veiw the entire study, click here.