why is corn ethanol cheaper in the mid-west than reg. gas?

Question

why is unleaded gasoline selling for $0.20 yes $0.20 cents per gallon in Venezuela, south ameraica.

Answer 1

Ethanol is big business these days in our search for alternative transportation fuels
It is also NOT the one & only answer But it will or can be a huge part of 'The Answer'

I think Yahoo!Answers needs to create another catagory within the Transportation catagory This is a very big question area & there are lots of reasons

Corn Ethanol is cheaper in the Midwest because thats where it is produced and Transporting Ethanol is different than transporting Gasoline It can't go in the same pipelines as the oil companies pipelines

Ethanol can be produced from many other substances....for instance BRAZIL makes theirs from sugar cane
almost all their cars run on ethanol
I don't know about you but I'm not moving to Brazil or Venezuela

I prefer the the good old U.S.A.

We can however learn from them .....I'm all for building ethanol production plants in Loisiana...growing sugar cane there shouldn't be difficult.

Katrina victims could benefit from that

Answer 2

I believe it is because of the government subsidies, ethanol is hot stuff right now because it doesn't contribute to global warming and is local, leases dependence on oil rich countries. Venezuela has huge reserves of oil so there are no transportation costs and there are probably government subsidies there as well given the socialistic policies of their president.

Answer 3

Funny enough, it's the same answer: subsidies from the Gov't.

Neither of these situations would exist without HUGE Gov't subsidies at the expense of the taxpayer. In the US, we pay BIG agribusiness (like ADM) huge excess costs (subsidies) to grow corn for ethanol production.

Answer 4

I believe that ethanol is cheaper because of government subsidies that support its producers. I think that if the gov quits support the cost will go up because it costs a lot to produce ethanol using the current methods.