By Jami Miedema

In my opinion, there is no better way to spend a hot day than boating on Lake Michigan. As I’m sure many would agree, this time of year is perfect for enjoying watercraft or taking a long, lazy drive to observe the beauty that summer has to offer. Unfortunately, these leisure activities are impacted by soaring gas prices, and fewer people are willing to pay such a high cost for a day of fun. Will gas prices fall in the near future? With the ongoing gas versus renewable energy debate, chances are they will not. One alternative to gasoline that may help us save money on fuel is ethanol, but not everyone is happy about its widespread use.

Ethanol is a fuel made from corn and grain products, and typically comes from the Midwest when produced domestically. It is also the main component in E85, an alternative fuel comprised of 85% ethanol and 15% gasoline. The ethanol industry is booming right now due to tax breaks and subsidies given by the government under the Energy Policy Act of 2005 to firms that are active in producing renewable energy and technologies that use renewable energy. Companies such as Archer Daniels Midland Co. and VeraSun Energy are just a few of the many producers who are planning to expand their production capacity to meet the nation’s demand for ethanol. GM is also jumping on the bandwagon by manufacturing more of their FlexFuel autos that use the E85 fuel. They plan to produce approximately 400,000 flexible fuel vehicles in 16 different models, in addition to the 2 million that are already on the road.

The benefits of using this renewable energy source are many. First, ethanol burns cleaner than gasoline, so it reduces the amount of greenhouse gases released into the atmosphere. Second, it improves vehicle performance because of its higher octane rating. Finally, in addition to being a renewable energy source, it also reduces our dependence on petroleum from foreign nations, as well as supports our country’s agriculture. Despite these advantages, the use of ethanol for fuel has run into some disadvantage, as well.

Ethanol is mainly produced in the Midwest, and bottlenecks may occur when trying to distribute it to meet demand on the U.S. coasts. With an increased supply from expanding capacity, but no efficient means of transportation, the ethanol industry will face an oversupply of their product, and a decrease in the price at which it is sold. Since corn prices are rising, it may be hard for ethanol producers to make a profit. While this is a fear of producers, it is necessary to create a demand for ethanol. Ethanol is estimated to have two-thirds the energy content of gas, so a significantly cheaper price of E85 compared to gasoline is needed for anybody to want to switch to using the alternative energy.

For those who use gas guzzling vehicles, do not expect the prices to fall anytime soon. Because the government is pushing for increased use of renewable energy, players in the oil industry are scaling back plans for expansion. Gas prices will stay high since the gasoline supply will be lessened. Even so, don’t despair if your leisure activities have dwindled – a bike ride or walk can be just as enjoyable!

Source: Herber, H. J. (2007, June 18). It’s oil vs. ethanol, and you pay. The Grand Rapids Press, pp. A1-A2.