Record Gas Prices Could Be Worse

MILWAUKEE – Despite record gas prices throughout Wisconsin, including $3.60 per

gallon in the Milwaukee area, things could be much worse for consumers in the state

without rising bio fuel production and use.

“Bio fuels are playing a critical role in keeping gas prices down for consumers, and

mitigating some of the negative economic effects of rapidly-rising fuel costs,” said

Joshua Morby, Executive Director of the Wisconsin Bio Industry Alliance.

Francisco Blanch, a commodity strategist with Merrill Lynch, said in a recent Wall Street

Journal article that bio fuel production worldwide has helped reduce the demand for oil –

so much so that oil prices would be 15 percent higher per barrel without bio fuels. [Source:

Wall Street Journal, “As Biofuels Catch On, Next Task Is to Deal With Environmental, Economic Impact,” March 24, 2008]

With oil currently trading around $115 per barrel, a 15 percent increase would equate to

$132 per barrel.

The Consumer Federation of America (CFA) echoed these sentiments in a report

released last month, which said that not only is ethanol helping to reduce the price of

gasoline, but because of the dramatic increase in ethanol production in Wisconsin, it has

extended gasoline supplies and mitigated what might otherwise be significantly higher

fuel prices. [Source: CFA, “Rising Gasoline prices: Why Can’t Consumers Catch a Break?”

http://www.consumerfed.org/pdfs/2008gasolineprices.pdf, March 2008]

Currently, the average ethanol rack price in Wisconsin is around $2.61 per gallon, with

the average E85 cost around $2.74 per gallon. E85 is sold at over 100 locations across

the state, and can be used in all flex-fuel vehicles capable of running the fuel.

“With ethanol blended at the vast majority of gas stations across the state, and the

availability of E85 increasing, bio fuels are vital to reducing our dependence on foreign

oil and keeping gas prices down,” Morby said. “Bio fuel production also helps create

good, high-paying jobs, and helps protect our environment. Wisconsin needs to

continue encouraging the production of bio fuels across the state, not only because of

the positive effects for consumers at the pump, but because of the economic and

environmental benefits for the state as whole.”

-moreFor

The Wisconsin Bio Industry Alliance is a diverse group of businesses, environmental

groups, and statewide and local organizations that have come together to build both

public and legislative awareness of the Bio Industry in Wisconsin.

For more information about the Alliance, or to find out how to join, please visit our

website: www.wisconsinbioindustry.com.

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