With oil prices continuing to skyrocket, a study puts a clear dollar figure on the savings from a new Missouri law mandating the use of renewable fuels: The study found that drivers will save $288.6 million in 2008 alone, an average of $72.80 per driver.
A leading expert on agricultural economy and biofuels, John M. Urbanchuk of the global expert services firm LECG (NASDAQ: XPRT), authored the study in conjunction with the Missouri Corn Growers Association.
“The ethanol mandate has been a great benefit for the state and its citizens. In addition to reducing our country's dependence on oil, Missouri is passing on a big cost savings to its drivers through cheaper gas at the pump,” said Urbanchuk.
Starting in 2008, Missouri became the third state to require all gasoline sold in the state to be blended with 10 percent ethanol (E-10). The LECG study found that the use of a 10 percent ethanol blend saved Missouri drivers 7.7 cents per gallon at the retail pump in 2007 for a total savings of $158.2 million, or $40 for each of Missouri's 3.9 million licensed drivers. Reflecting current gasoline and ethanol price movements the savings are expected to average 9.8 cents per gallon or $72.80 per driver this year as 10 percent ethanol is used statewide in 2008.
Urbanchuk has advocated use of ethanol and biofuels, even as detractors have named ethanol as a main cause in the rise of corn and consumer food costs. The LECG study, “The Relative Impact of Corn and Energy Prices in the Grocery Aisle,” was cited last year in Ethanol Producer Magazine as well as Rural Cooperative Magazine, which are published by the U.S Department of Agriculture.