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gasprices

Last week, I drove to Iowa for work. I stopped for gas at the Iowa 80 Truck Stop, which proudly bills itself as the World’s Largest Truck Stop. Notice anything interesting about the gas prices (above)? If you own a car, you probably instantly noticed that silver is priced 12 cents less per gallon than regular gas. That’s not an error; mid-grade gasoline is often less expensive than regular-grade in Iowa because it contains 10% ethanol. But is this really as sweet a deal as it seems?

First of all, it’s important to remember what the different grades mean. Silver or Ultimate gas doesn’t result in better gas mileage, it just has a higher octane rating. This has to do with the activation energy required for the fuel to combust, with a higher octane rating corresponding to a higher required activation energy. This may seem counterintuitive, but high performance engines operate at higher compression ratios, which would cause low-octane fuels to detonate in a less controlled manner, causing “engine knocking.” I’m not what you would call a “car guy,” but it seems to me that 95% of the cars on the road would be just fine on plain old 87-octane gasoline, and it’s a little unnecessary for every gas station to offer three different grades of fuel.

Now to Iowa’s special deal. Iowa grows more corn than any other state, and by complete coincidence the state also happens to be one of the loudest voices lobbying for biofuels. One result of their efforts is that gasoline is allowed to contain up to 10% ethanol. If you look closely the next time you’re at the pump, you’ll probably see a sticker informing you of this fact. For reasons I don’t fully understand, most gas only contains about 5% ethanol, even though ethanol is less expensive than gasoline. But the magic $2.299 silver-grade gas has the full 10%, a mixture that used to be called gasohol, but that term seems to have lost appeal.

So why silver? Why not make the regular-grade contain 10% ethanol so it would be even cheaper? The answer to that question is actually relatively straightforward. Ethanol has a higher octane rating than gasoline (something around 120 or 130), so by adding it to regular gas, it increases the octane rating up to the silver level (89, up from 87).

This is all well and good, but there is one very important fact to remember, especially as E85 (85% ethanol fuel) becomes more prominent. Ethanol is not as energy-dense as gasoline, which translates to fewer miles per gallon. According to the aforelinked table, gasohol is only about 2 or 3 percent less energy dense than normal gas. The silver gasohol from the pump in Iowa was still a slightly better deal; you get about 1.7% more energy per dollar over regular gasoline. But what’s more interesting is calculating the cost of ethanol versus gasoline. If we generously assume that the regular gas has no ethanol, we can use algebra to calculate the maximum possible cost of the ethanol in the 10% mixture:

equation

Pardon the math, I got a little carried away. But ethanol isn’t nearly this cheap to produce from corn. It’s no surprise that corn-based fuel is being heavily subsidized, but it’s important to remember that at the moment it’s not even close to being an economically viable alternative to fossil fuels. And when you burn ethanol, you’re still polluting about as much as you do when you burn gasoline. Biofuels such as corn ethanol are being trumpeted as a baby step toward a better energy future, but we shouldn’t be wasting time with baby steps. A more drastic shift is necessary.