Does E85 Really Cost That Much?

November 17, 2006

It’s becoming one of the age old arguments. Did Babe Ruth really curse the Sox? Does the Lochness Monster really exist? Does E85 really cost that much to install?

Okay. So maybe it’s not that quite popular of a debate, however, among the industry experts, the quarrel that E85 costs too much is starting to pick up some speed.

The case for station owners is that not only is E85 expensive to install, it’s not selling, so the lack of consumer interest is a major obstacle in getting E85 off the ground nation wide. Granted, there are reasons that the 85 percent ethanol, 15 percent gasoline formula isn’t popular among the masses -- not many people have invested in a flexible fuel vehicle just yet.

The numbers don’t measure up. It has been reported that a dispensing system can cost $75,000, whereas converting a single pump can cost $15,000. What could make the difference is many states offer incentive programs to assist with the installation and implementation of E85 pumps and stations, such as tax credits and fuel tax exemptions. But it seems that it’s not so much about the refunds available to providers as it is more about the cost of equipment and the current lack of sales that don’t pay.

This article reports that it costs approximately $200,000 to fit an entire gas station for the E85 option. (I’ve yet to find a source that also cites this price.)

(By the way, in that article, the reporter makes it sound like the $.54 tariff per gallon on corn juice hurts the industry...um, who the heck imports corn juice? Do we not have enough here?)

According to The Bay City Times:

As far as biodiesel pumps go, we've got to wonder whether any new equipment or converted gear is even needed.

Bus fleets, truck fleets, farmers and others report that their expensive engines run better than ever using biodiesel blends.

No changes needed.

In a time of war, impending gas crisis, natural disasters, et al, it would, you know, be wise to start thinking about moving forward with the E85….