Gasoline with a blend of 85 percent corn ethanol, popularly called E85, is cheaper at the pumps but has fewer fans.
A gas station near Alameda Avenue and Broadway in Denver sold the blend at $1.699 a gallon Tuesday, 14 cents cheaper than regular unleaded gasoline.
But 30 percent fewer customers are buying E85 compared with last summer, when the blend was 40 cents cheaper, manager Gary Grabianowski said.
Only certain newer cars are engineered to use the blend, which gets about 20 percent less fuel mileage than regular gasoline.
Ethanol’s demand is slumping and supply is mounting across Colorado and the nation — prompting supporters to push the Obama administration to allow a mix of 15 percent ethanol in regular gasoline, compared with 10 percent today.
Nationwide, the average price of E85 was $1.658 a gallon Tuesday, more than a dollar cheaper than a year earlier, according to www.fuelgaugereport .
“Increasing the ethanol blend up to E15 is a common-sense solution to our economic, energy and environmental challenges,” retired Gen. Wesley Clark, co-chairman of Growth Energy, an ethanol lobby, recently told a gathering in Washington.
E15 would create a vast market for ethanol producers struggling to sell growing supplies. Normal cars could run on E15 without any engine modification, Clark said.
It also would create 136,101 new jobs and pump $24.4 billion into the American economy each year, he said.
A federal mandate requiring the production of 36 billion gallons of renewable fuels by 2022, along with a subsidy of 45 cents per gallon to ethanol blenders, has boosted supply in recent years.
But ethanol has its detractors.
Some blame higher corn prices, boosted by ethanol demand, for rising food prices. Some question whether ethanol takes more energy to produce than the energy derived from it, while others doubt that the fuel can compete with gasoline in the long run.
“It is very tough to be an ethanol producer right now,” said Robert Mayer, an associate editor at Platts, an energy-consulting firm in Houston.
Companies have shut down 24 ethanol distilleries in recent months — idling 2 billion gallons out of 12.5 billion gallons of annual production capacity.
“Corn prices are relatively high, and demand for ethanol is relatively low,” Mayer said. “We are continuing to build ethanol facilities and having trouble finding places to put it.”
Gargi Chakrabarty: 303-954-2976 or gchakrabarty@denverpost.com
