Record Gas Prices Fuel Ethanol Interest, But Risk Recession

by | Jun 6, 2022 | Energy, Indiana Agriculture News, News Feed

The biofuel industry says record gas prices are fueling huge interest in blending more and higher blends of ethanol.

Renewable Fuels Association President and CEO Geoff Cooper says the near-weekly records for gas prices are having a direct impact on blending of corn ethanol.

“We’re seeing unprecedented interest in the wholesale market and blending sector in E15, we’re seeing E85 sales really taking off in certain parts of the country and that’s because ethanol, you know, as recently as yesterday was selling for $1.30 less than gasoline,” according to Cooper.

He says it wouldn’t surprise him if average gas prices continue to rise based on futures prices for pure gasoline. The flip side is recession.

“Yeah. And that’s absolutely a concern and a risk. We’ve seen that many times in the past. Surprisingly $4 gasoline has so far not led to this sort of demand destruction that we have experienced in the past. At some point you’re right, you hit a breaking point where consumers really put the brakes on and stop driving so much.”

Cooper doesn’t know at what price the fuel market goes ‘south.’ At some point, he says record prices will have an impact, and drivers will buy less gas—and with it, less ethanol.

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