Flexible Fuel Vehicles
Ethanol Investments
Making Ethanol
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E85 (ethanol blend) is frequently sold for up to 35% lower cost per quantity than gasoline.
What are Ethanol Fuels?
Ethanol is an alternative fuel produced by fermenting and distilling starch crops, feedstocks for this fuel include corn, barley, and wheat.
Ethanol can be blended with gasoline to create E85, a blend of 85% ethanol and 15% gasoline.
As of 2005, E85 is frequently sold for up to 35% lower cost per quantity than gasoline. Much of this discount can be attributed to various government subsidies, and, at least in the United States, the elimination of state taxes that typically apply to gasoline and can amount to 47 cents, or more, per gallon of fuel. The US federal tax exemption that keeps ethanol economically competitive with petroleum fuel products is due to expire in 2007, but this exemption may be extended through legislative action. In the aftermath of Hurricane Katrina in 2005, the price of E85 rose to nearly on par with the cost of 87 octane gasoline in many states in the United States, and was for a short time the only fuel available when gasoline was sold out, but within four weeks of Katrina, the price of E85 had fallen once more to a 20% to 35% lower cost than 87 octane gasoline.
Vehicles that run on E85 are called flexible fuel vehicles (FFVs) and are offered by several manufacturers. See the ethanol vehicles page for more information on FFVs.
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