Ethanol a Good Response to Rising Gas Prices?

It's not something you see everyday. Usually when you go to the gas station, the higher the octane of the fuel, the higher the price. But when it comes to ethanol it's quite the opposite, and that could save you money at the pump.

"Today ethanol is priced about a dollar wholesale price, about a dollar under gasoline, so the consumer should also see some advantages in cheaper gas pump prices," said Chuck Hofland, General Manager of Siouxland Ethanol.

And Hofland says that isn't the only advantage.

"The economic benefit for the farmer is simply that there is a higher value for the corn that he sells," he said.

Right now the most common percentage of ethanol you'll see at the pump is 10 percent and most cars can run on that just fine. But as the percentages get higher, unless you have a flex fuel car, it could actually cause damage to your engine.

"EPA a year ago said that they did some studies and any car that is newer than 2001 can burn E-15 (fuel with a 15 percent blend of ethanol) today," he said.

Hofland says the problem is most gas stations don't have room to hold ethanol based fuel and conventional gasoline at the same time.

"Some of that is just logistics, and it's going to take time to get that infrastructure in place," Hofland said.

He says ethanol is a cleaner burning fuel than conventional gas. However grassroots environmental network Friends of the Earth argues that point.

In a press release they said "Corn Ethanol is extremely dirty. It leads to more climate pollution than conventional gasoline and it causes deforestation as well as agricultural runoff that pollutes our water."

Hofland says the next step is getting automobile manufactures on board with them this way more cars can use a higher percentage of ethanol safely.