Factors That Will Lead To Higher Gas Prizes


Did you know that the United States is the largest grower of corn in the world and this it’s our country’s number 1 (legal) cash crop? Corn makes up a little over 15 percent in the total crop market, one that’s priced at over $100 billion, according to estimates from the Usa Environmental Protection Agency (EPA).

All those countless acres of harvested corn get utilized, too. The vast majority of the corn crop goes to feed animals here and abroad, including livestock, poultry and also farmed fish, according to the National Corn Growers Association. In addition, it feeds us in a variety of ways, too.

Increasingly, use of corn as fuel has seen a dramatic rise. This Year, 40 percent from the corn grown in the Usa went to the production of ethanol. It gets blended into gasoline to act as being a fuel system cleaner and in the case of E85, makes up the majority of the product. A small percentage of the corn crop also goes towards producing other alternatives, such as bio-diesel.

Since 60 percent of the land mass in the continental U.S. is now included in drought conditions, many of the regions of the country where corn is really a major crop – 78 percent of corn growing regions – have experienced drought conditions through the entire season. Thus far in 2012, the United states Department of Agriculture (USDA) has declared, 1,369 counties in 31 states as disaster areas – 1,234 due instantly to drought – and USDA continues to lower projections on harvests.

The drought is certainly affecting farmers who grow corn. According to USDA’s National Agricultural Statistics Service., 45 percent of the Usa corn crop is now rated in very poor to poor condition. That number represents the worst conditions for any time of year since 1988, says the USDA.


There are a number of flex fuel vehicles (FFVs) on the market that could burn normal gasoline – which often contains 10 percent ethanol, and some have called for the federal government to mandate increasing to 15 % – or E85, which is actually a blend of just 15 percent gasoline to 85 percent ethanol. There are over 8 million FFVs functioning in the United states

E85 is truly the cheapest option by the gallon when a filling station offers it, and it’s often given government pricing subsidies. As traditional gasoline prices have fallen, most drivers with flex-fuel vehicles have opted to fill up with gasoline, although at the start of the year, an oversupply of ethanol saw low prices. And pressures on the corn supply have led to increases in the cost of ethanol.

The nationwide average cost of a gallon of gas sits at $3.42, according to 85prices.com. E85, on the other hand, has a average United states price of $3.09 a gallon. Using basic math, it’s apparent that E85 is $.33 cheaper per gallon than gasoline on average, a pricing spread of 9.1 percent.

There’s a dirty secret at play that requires over simple subtraction to gauge, however. E85 simply don’t achieve the same fuel economy with gasoline and ethanol. E85 vehicles often lose 25 to 30 percent of the MPG delivered when using the ethanol-heavy E85 as an alternative to gasoline. That effect is because of E85 having less energy content than gasoline.

If a gallon of E85 is priced lower, even though some pundits keep a $.40 spread is sufficient, consumers only need give you a quick glance to the official numbers offered by the EPA to see that using E85 costs over burning gasoline, even.


Price increases due to drought will be felt in the fee for gasoline, only moderately, because ethanol does contribute to the makeup of most gasoline sold in the United States.

Executive Director of the Illinois Petroleum Council told CBS television station KMOX there’s probably no danger from the drought posing “a big immediate start gasoline prices because of an ethanol shortage.? dave Sykuta?

Skyuta additionally advises that there’s plenty of corn in storage, and federal regulations govern fuel production. He’s quick to caution that “it remains to be seen regardless of if the corn supply will effect future gasoline prices.?, however?

Shyuta only takes cost of ethanol and potential crop projections into consideration, however. The price of oil has the biggest percentage of the fee for gasoline, estimated to be 62 percent during June 2012 according to the Usa Energy Information Administration (US EIA). Even though ethanol makes up 10 percent of most fuel blends, it’s a lesser fraction of the overall cost.

About Cecil Helton

Cecil Helton Cecil Helton is a United states-based writer and editor with passions for technology, boats, cars, motorcycles and social media. Much of his professional life since 1996 has been web-centric, and he’s developed and written content on a variety of subjects. His operate in the houseboat industry received wide acclaim, such as winning the 1999 Cisco Systems Growing with Technology award and being named certainly one of five finalists in the manufacturing sector from the 2000 Computerworld-Smithsonian Awards. He spent a great deal of his childhood in a two-year cycle of moving completely to another place, making new friends, establishing a life, and then moving again, as being an Air Force brat. Destinations included: Texas, Kentucky and Illinois the Greek isle of Crete, California and Ohio. Today you’ll find Cecil coping with his 15 years old son’s decision to pursue a motorcycle license at the same time he gets his driver’s license, being active throughout the web on multiple social networking sites, not to mention, writing articles and creating content on automotive and vehicle insurance related topics right here at CarInsurance.org.