For about the past four weeks, most Missouri gas stations and convenience stores have been selling gasoline without ethanol, Ronald Leone, executive director of the Missouri Petroleum Marketers and Convenience Store Association, told the newspaper.
"The economics in the past three to four weeks have changed [to] where unblended fuel is less expensive [image-nocss] than E10," Leone said.
A law that went into effect in January required all gasoline to be blended with 10% ethanol, or E10, if the renewable energy source was cheaper than regular gasoline. Leone's group fought to include the price trigger provision so consumers always get the least-expensive product.
The cost of unleaded gasoline in Springfield, Mo., averaged $1.55 a gallon on Tuesday, though some stations around town were selling it for as low as $1.38, according to AAA and MissouriGasPrices.com.
Southwest Missouri has some of the cheapest gasoline in the country, with the national average hovering at $1.88 per gallon, according to AAA. A year ago, the national average was $3.08, and Springfield's average was $2.88 a gallon.
After a summer when $3.50 gasoline was the norm, the sudden drop in prices has taken ethanol advocates by surprise. See related story about ethanol producer VeraSun elsewhere in this issue of CSP Daily News.
Even E85a blend of 85% ethanol and 15% gasolineis now more expensive than regular gasoline at many stations in southwest Missouri. Cody's Convenience stores were selling E85 for $1.53 a week ago, two cents higher than regular gasoline.
"The gas price has really dropped tremendously, and ethanol has not quite kept up with the pace," said Ron Hayes, director of the Missouri Department of Agriculture's weights and measures division, which monitors gasoline sales in the state.
The drop in the price of oil has "really slowed down, if not stopped, any additional expansion of capacity" at the state's six farmer-owned ethanol plants, said Gene Millard, president of the Missouri Renewable Fuels Association.
"Plants are just not going to start up producing a product that's showing negative pricing margins," said Millard, chairman of a farmer-owned ethanol plant in northeast Missouri.
Millard said part of ethanol's inability to compete with current gasoline prices resulted from corn prices fluctuating greatly this year, dropping from as high as $7 a bushel in early July to its current level of about $3.50.
The volatile prices of corn and oil have left ethanol investors with an unknown future.
"In some respects, we've got to take a long-term view of how we're going to address energy price volatility," Millard said. "Nobody knows what the future holds, that's for darn sure."
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