Many who wonder why gasoline prices went through the roof a couple of years ago, even here in oil and gas rich Texas, only need to look at the gasoline distribution system. Mark my words, the distribution system is only one of many reasons why gasoline is so high, but it is the one thing that was mandated by a 2003 vote in congress.
The system and infrastructure that was designed and built to distribute gasoline was designed with the idea that only gasoline would be distributed in the pipelines. Indeed, that is what is shipped, and not gasoline-ethanol blends. Part of the reason is that metropolitan areas have mandated E85 as the blended gasoline of choice to mitigate smog problems – ethanol blended gas burns cleaner with fewer pollutants. Gas stations inn rural areas still sell unblended gasoline - and it’s cheaper. It’s cheaper because the ethanol has to be distributed separately and blended locally, and that, despite federal subsidies of the price of ethanol, makes it more expensive.
One reason ethanol is distributed separately is that ethanol is infinitely soluble in water. Water mixes easily with ethanol, allowing impurities dissolved in the water to become absorbed by the ethanol. Phase separation occurs when water-laden ethanol and gasoline is combusted, and that reduces engine performance.
And that is one reason your gasoline prices are so high, and it was mandated by HR 6 of the 2003 legislative session – the so-called Energy Policy Act of 2003.
What does that have to do with just-passed HR 547? HR 547 is an effort to undo some of the bad policy in HR 6. HR 547 sends a mandate to the EPA to fund studies that make blends of ethanol and gasoline compatible:
“The Assistant Administrator of the Office of Research and Development of the Environmental Protection Agency (in this Act referred to as the `Assistant Administrator'), in consultation with the Secretary of Energy and the National Institute of Standards and Technology, shall carry out a program of research and development of materials to be added to biofuels to make them more compatible with existing infrastructure used to store and deliver petroleum-based fuels to the point of final sale.”
They want to fund research to find additives to gasoline/ethanol blends that prevents all of the problems encountered in distributing these blended fuels by pipelines.
My congressman, Nick Lampson, was a co-sponsor to this bill which had strong bi-partisan support.
Will this result in a decrease in the price of gasoline?
On this, or on anything if the title of this blog is to believed, I am not optimistic.