Why is Ethanol almost as expensive as gasoline?

Answer 1

It is most pure, less additives

Answer 2

byderule has a good answer

I would add the following:

Ethanol's price reflects the cost to make ethanol. The price of gasoline reflects the fact that other people are willing to pay that price -- the price reflects supply and demand -- even though the cost to make gasoline is far lower than the cost to make ethanol. This can be seen in the large profits, which are not bad. Would you rather the production of gasoline involve the use of more resources just to see a lower profit margin?

Gasoline is taxed, making it more expensive. Ethanol receives tax breaks and subsidies, artificially lowering its price relative to gasoline.

The push towards ethanol is partially motivated by pork-barrel politics, partially by political pandering. The public wants to see Congress do something, so Congress does something that benefits their constituents, and most of the public is left ignorant of the true environmental costs of ethanol.

Answer 3

Supply and demand.

Is basically very simple. It is really no different than asking why gold is more expensive that steel. It is not only supply and demand, it is also how hard to it to get the gold and steel. It simply is much harder to find the rare gold as compared to the plentiful iron. Oil is about as easy to find as ethanol is to make. For now. Some day, oil will run low, the price will go way up, like gold is now, and more people will start making ethanol because they will have a giant crowd of people willing to pay as much as the expensive oil just to get anything to run their car so that don't have to walk 8 hours each day to get to and from work. But there is a cost to that. Millions of acres of farm land to grow the crops to make the ethanol. In fact, I doubt there is enough farm land in the world to grow enough crops to make as much ethanol as the oil we use now.

Answer 4

It depends on where you are. Here in the mid west of Us its actually less for E10 89 octane plus fuel then regular gasoline. As production increases it will even get cheeper. What needs to happen is the taxes on the pump need to come down on Ethanol. Currently it is taxed like gasoline.

Answer 5

Because it takes massive amounts of water, electricity and oil to produce. Farmer's use alot of nitrogen-based fertilizer, heavy machinery and irrigation water to grow corn, which then has to be taken to the distillery. Distilleries use alot of power, and many rural electric companies are now trying to build more coal plants to power ethanol distilleries. Finally, ethanol is corrosive, so it can't be shipped in a pipeline. You have to use rail and trucks to move it around. If you think it's expensive now, try actually using it. A vehicle running on E-85 gets as much as 30% worse mileage. Plus, you're getting a 50 cent per gallon break on the price thanks to the federal government and the corn lobby.

Answer 6

It's in the early stages so it costs more to produce. Once they figure out a more efficient way the price will go down because there are less taxes on Ethanol.

Answer 7

Because it costs a ton to produce, especially since it's in the early stages. Right now it's a fledgling industry, which means the industry has to convert land, buy farms, build plants, advertise and market, and distribute. Over time, if it takes off the way it should, the cost may go down...

... or they could choose to artifically inflate prices and increase margins, like oil people have done for years. Let's hope it doesn't go that way!

Answer 8

It is actually more expensive at the wholesale level, but it gets a tax break at the retail level that makes it less costly than gasoline.

Answer 9

Because we have not industrialized the production of Ethanol yet.. So it still costs a lot to make it...

Answer 10

because it takes more energy to produce ethanol than gasoline.

More energy = higher price

The down side of this is, this "energy" is dirty energy, so ethanol is actually worse for the environment than gasoline.