You are wrong! Ethanol was lowering gasoline prices at the pump by 25% that equals $1 a gallon on $4 gas. We can't mandate 30% ethanol because shortage & imbalances will cause prices to rise. 10% ethanol was only mandated to replace MTBE because it contaminated the water supply.
There use to be lower taxes on ethanol at the pump. But since idiots in congress raised ethanol taxes December 31, 2011 the price you pay for gas & ethanol skyrocketed 45 cents a gallon. Enjoy bending over & taking it up the wallet even more at the pump. Ethanol held gasoline prices down over $1 a gallon. If you idiots keep on believing the garbage the oil companies keep spewing & ban ethanol, gas price will increase another $1 a gallon to stay permanently over $5 a gallon.
Note the price spike in gasoline at the pump when taxes were raised on ethanol on December 31, 2011. Enjoy the higher prices you tax & spend idiots!
We produce enough ethanol to supply 15% of the gasoline in this country. That means E85 sales were over 5% of pump sales & that competition was holding gasoline prices down. Since the ethanol tax increase made it less competitive it caused the ethanol storage to swell & production falling since 1/1/2012. Gasoline demand has increased by 5% since that time.
Ethanol is still replacing 10% of gasoline so it still holds down prices but ending the ethanol tax break most certainly increased the price by 45 cents at the pump. I do know it was holding gas prices down by at least 25%. Here is how I can prove it.
In the winter the demand for heating-oil/diesel-fuel is high & gasoline is low. That makes gasoline a bi-product from the barrels of crude oil they refine into heating oil. So the gas price dropped below & heating-oil/diesel-fuel would rise above gasoline every winter.
The exact opposite happened every summer.
In the summer the demand for gasoline is high & heating-oil/diesel-fuel is low. That makes heating-oil/diesel-fuel a bi-product from the barrels of crude oil they refine into gasoline. So the heating-oil/diesel-fuel price dropped below & gasoline would rise above heating-oil/diesel-fuel every winter.
Before the big rise in Ethanol production this translated into gasoline being at least 25% higher than diesel-fuel at the pump in the summer & diesel-fuel costing at least 25% more than gasoline in the winter.
Now in the past 4 years since ethanol production ramped up gasoline prices never even get as high as diesel-fuel even in the summer. At current prices that means Ethanol is holding Gasoline prices at the pump down by at least a $1 a gallon. Last years drought plus this years corn seed shortage & to cold & wet planting season has stopped ethanol exports & triggered importing for the first time. Gas prices are higher because of less ethanol competition.