The Trump administration’s decision to allow the year-round sale of gasoline with a higher concentration of ethanol will give farmers more opportunities to sell corn and could lower fuel prices for consumers, according to Pacific Ethanol CEO Neil Koehler.
“It is a great day for farmers, ethanol producers, consumers who will have access and choice at the pump to a low-cost, clean-burning fuel,” Koehler said during an exclusive interview with FOX Business’ Liz Claman on Tuesday.
Ethanol is less expensive to produce than gasoline, which can potentially bring prices at the pump down for some motorists. The average price for a gallon of regular unleaded gasoline is $2.91, according to AAA.
Koehler said the regulatory changes will drive growth for the biofuel, and consumers will be able to buy E15 at a nickel to a dime less than regular gasoline.
“Ethanol today on a wholesale basis – and this is really the good news for the consumer – is 80 cents a gallon cheaper than gasoline,” he said.
Gasoline generally contains about 10 percent ethanol. The Environmental Protection Agency (EPA) allows the use of E15, a blend of 15 percent ethanol and 85 percent gasoline, as part of the Clean Air Act.
E15 is currently banned in summer months due to smog concerns.
Lifting the federal ban on the summer sale of high-ethanol blends of gasoline could potentially boost corn usage in the U.S. The amount of corn used for ethanol production is an estimated 40 percent, leaving many to wonder if it will leave a deficit for animal feed and human consumption.
“The corn grown in the United States is grown for feeding animals. We are actually taking that feed value and improving it so it’s really great news for animal feeders as well as consumers of gasoline,” Koehler said.
Pacific Ethanol shares soared 54 percent Monday in anticipation of higher ethanol sales.