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Study: Allowing E15 Fuel Blend Could Save California Drivers $2.7 Billion at the Pump Annually

July 9, 2024

E15, State News

           

Researchers from UC Berkeley and the U.S. Naval Academy found adopting E15 blend gasoline could save Californians 20 cents per gallon

 

A new study by economists at UC Berkeley and the U.S. Naval Academy found California drivers could expect to save 20 cents per gallon if the state allowed gas stations to sell E15 fuel – a blend of 15 percent ethanol and 85 percent gasoline approved in all 49 other states.

 

The potential savings for California consumers could reach $2.7 billion annually, according to the study authored by David Zilberman, PhD, a distinguished professor in the Agricultural and Resources Economics Department at UC Berkeley, and Scott Kaplan, PhD, assistant professor in the Economics Department at the United States Naval Academy.

 

“Consumers have the potential to gain significantly from the introduction and purchase of E15,” according to the study. “In particular, our estimates suggest an approximately 20 cents per gallon discount for E15 compared with E10 after adjusting for energy content.” The authors also highlighted the benefit of E15’s lower carbon emissions. “In California, price savings for lower GHG intensity fuels are larger, likely due to California-specific policies incentivizing low carbon fuels.”

 

California is the last remaining state to limit ethanol inclusion in gasoline to just 10 percent (E10), but state regulators are considering approval of E15 after extensive vehicle testing showed the fuel offers important emissions benefits. E15 is legally approved by the U.S. Environmental Protection Agency for use in all cars, pickups, SUVs and vans manufactured in the last 24 years.

 

The study, sponsored by the Renewable Fuels Association, details the economic viability and implications of adopting E15 in California by analyzing fuel characteristics, market dynamics, and regulatory influences. Beyond direct cost savings, researchers found that increased use of ethanol-blend biofuels lowers gasoline usage, enhances energy security and reduces greenhouse gas emissions.

 

“Based on this study’s results, a typical California household could save $200 per year on their gas bill if state regulators would simply allow drivers to fuel up on E15,” said RFA President and CEO Geoff Cooper, noting that more than 24 million registered vehicles in California are already approved to use E15, but stations are not allowed to sell it. “It’s time for California to catch up to the other 49 states that already allow consumers to choose lower-cost, lower-carbon E15. The state’s failure to approve the use of E15 essentially amounts to a gas price hike at a time when hardworking Californians can least afford it.”

 

The study also found that “low-income commuters may stand to gain the most from a transition towards E15,” given their propensity to have longer commutes and less fuel-efficient vehicles.

 

An earlier study commissioned by the California Air Resources Board found that adopting E15 in California could also provide significant environmental benefits, cutting emissions of tailpipe pollutants—like particulate matter and carbon monoxide—that cause air quality and human health problems.