May 13: GAS PRICES WOULD SOAR WITHOUT BIOFUELS: A new report spells out the ugly truth about what would happen to gasoline prices if we cut back the amount of ethanol fuel in the market today. Biofuels have become an essential component of the world’s motor fuel supply, according to the International Energy Administration (IEA).  In a just released report, IEA estimates that biofuels will account for nearly two-thirds of the non-OPEC oil supply growth this year, a “sobering” amount of the fuel supply.

 “While it seems unlikely that biofuel targets will be reversed in the near future, it is sobering to realize the amount of oil that would be needed to replace them,” the IEA said. "Just offsetting the biodiesel and ethanol added to the U.S. and European markets since 2005 would require around 1 million barrels a day of additional crude oil supplies to be processed.”                                                                                                                                                        <http://mcsv.net/cgi-bin/redir?MCid=C28ZqT1zpA8eBvHogxou> 

The IEA is the latest in a series of experts highlighting the critical importance of biofuels in the fuel supply.  Merrill Lynch analysts Francisco Blanch recently told BusinessWeek that the impact of removing biofuels from the fuel supply would be dramatic:

“For one, the billions of gallons of ethanol are moderating oil prices by ‘easing energy bottlenecks,” says Francisco Blanch, head of global commodity research at Merrill Lynch.  Blanch figures that oil prices would be at least 15% higher than they are, if not for today’s output of ethanol.”                                                                                         <http://mcsv.net/cgi-bin/redir?MCid=hdeZ0JfuSm8eBvHogxou>

IowaStateUniversity’s Center for Agriculture and Rural Development has estimated that American drivers are saving between $0.30-$0.40 per gallon thanks to the use of ethanol.                                                                                   <http://mcsv.net/cgi-bin/redir?MCid=QwS3h1qDyq8eBvHogxou>

And, economist John Urbanchuk recently told Reuters that removing even 50 percent of the ethanol scheduled to be used this year would “add a bit over $1.10 a gallon to gasoline in the short term because you've got to go out and replace that 4.5 billion gallons of ethanol.”                                                                                                              <http://mcsv.net/cgi-bin/redir?MCid=z2MEGiHXkW8eBvHogxou>

“Biofuels are an essential part of our nation's gasoline supply,” said Renewable Fuels Association President Bob Dinneen.  “Without ethanol, Americans would likely be paying $4.25 per gallon for gasoline.  Considering the impact of higher fuel prices on the cost of all consumer goods, especially food, ethanol is working to keep prices far lower than they otherwise would be.”

Dinneen continued, “In the face of record oil, gasoline and diesel prices, it might seem pennywise but would be pound foolish to walk away from our commitment to biofuels and a diversified energy future.”