Sunday, May 11, 2008

Numbers Behind Price Calculator

Here is a quick but thorough explanation on how I built the ethanol price calculator. The best way to debate the ethanol issue is to be as transparent as possible about what numbers people are using and where they came from, because they can alter the final product and lead to the wide variations and inaccurate reporting that we often see.
To calculate how much less ethanol blends should be, we must consider the energy density. This is the amount of energy in the fuel molecules that can be converted into mechanical energy for the car.
Energy density of Ethanol = 24.8MJ/L
Energy density of Gasoline = 34.3MJ/L

This comes out to approximately 28% decrease in energy for ethanol over gasoline. Once this value is known, then the next step is to figure out how much blend is going into the tank. For example, if only 10% of the fuel is ethanol, then only 10% is susceptible to the 28% decrease. In other words, 10% of 28 is 2.8%, which is the amount of mileage decrease you would see in a car filled with E10. The same goes for E85 blends, where you would take 85% times 28 and find that the decrease is 23.8% over filling your tank with 100% gasoline. I then took these values and multiplied the original price of regular unleaded by these percentages to find the amount of money to subtract off the original price of gasoline to get the amount that the ethanol blend should be sold for.

Here's an example:
-If regular unleaded costs $3.70 per gallon and you want to fill up with 10% ethanol, you would:

1) Take 28% times 10% to find that the decrease in mileage is 2.8% per gallon.

2) 2.8% times $3.70 per gallon gives us .1036. (So 10.36 cents per gallon should be taken off the original price).

3) Finally, subtract $3.70 by 10.36 cents to get $3.59 per gallon should be the price of E10.

I hope this helps those to figure out on their own whether ethanol blends are worth their money. If they are not, please write to the gas station owners or your local legislature to make sure that we aren't being taken advantage of by blenders who want to earn more money by decreasing the margin between regular gasoline and ethanol blends.

Ethanol Price Calculator

After an exciting and illuminating conversation I had this Mother's Day, I figured that along with my blog posts I should try to keep people informed about ethanol's pricing. One thing I've noticed in the past few weeks as gasoline prices rise is that the margin between regular unleaded gasoline and E10 super unleaded has remained the same. While in this part of Iowa, the price differences are usually 10 to 13 cents per gallon cheaper for the ethanol blend; making them cheaper to buy than regular gasoline, it may not be the case in other parts of the country. I wholeheartedly feel that during this "growing-pains" period in corn-based ethanol production the worst thing that those involved with ethanol can do would be to make ethanol blends less affordable based on energy density (which controls the number of miles you can travel on a gallon of the fuel blend). For this reason, I have installed a quick price calculator to the right of the blog posts. Simply enter the unleaded regular price of gasoline at the station near you and it will tell you the price of E10 and E85 that you would pay above which you are being charged too much. In my next post I will go over how I made these calculations.
A final note is that several studies from the University of Minnesota and South Dakota State University made preliminary findings that point out the possibility that ethanol might not cause the full dip in mileage that would be dictated by its lower energy density. If you want to read my blog post on this, copy and paste the following link:
However, this is a debate that is still ongoing and so I didn't include any of their findings that might alter the mpg, as you will see in my next post on how prices for E10 and E85 were calculated.