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Ethanol producer says E15 could be priced even lower at the pump

Consumers see E15 as a cheaper way to fill their tank, but an ethanol producer says the price at the pump could be even lower.

Erik Huschitt with Badger State Ethanol in Monroe, Wisconsin, says, “There is some space here to pass these savings back to the consumers, especially at a time when they need them.”

Huschitt tells Brownfield his company makes ethanol, and they sell fuel at their Monroe and Platteville, Wisconsin retail sites. “Our E15 blend, Unleaded 88 if you will, it’s a thirty-five-cent discount to E10, you know, so there is marketability to price this and get some attention, and let’s move the gallons.”

Huschitt says in the current market, the wholesale cost of ethanol, gasoline blending stock, and Renewable Identification Number or RIN credits, it’s fair to say that E15 should be priced even lower than it is right now. “If we’re selling it at a thirty-five-cent discount, I bet you the guy next to us isn’t going to be a five-cent discount, so right now, we still have limited infrastructure that can sell these higher blends, and what we need to do is we need to smash this ceiling wide open, and then we need to have everybody doing these. Competition is the thing that will fix this.” He says passing year-round nationwide E15 will provide market certainty and spur investment in retail infrastructure to allow more competition. Huschitt says nationwide, only 11% of gasoline has ethanol blended into it.

Huschitt says the pricing will vary by region, and not because of the availability of ethanol.  He says the reduced number of gasoline refiners combined with their frequent shutdowns raises the blending stock costs, and the local basis on the corn market can impact the cost of making ethanol.

Huschitt says other factors impacting the fuel market include RIN credits becoming more expensive as oil refiners battle against the Renewable Fuel Standard, and the explosion of vegetable oil blending for renewable diesel production. 

AUDIO: Erik Huschitt from Badger State Ethanol discusses E15 pricing, availability, the recent House E15 vote, and more with Brownfield’s Larry Lee