Expect gasoline prices to climb into the $2.80 range, the Oil Price Information Service warns, because Hurricane Harvey has knocked out 20 percent of the United States' crude oil refining capacity.
The bad news outside the hurricane zone is that transportation suddenly has become substantially more expensive. That doesn't just mean it's more expensive to get to work, it means it's more expensive to get food from the field to the processor and to the shelves of the supermarket.
We've seen it happen before when fuel shortages touched off price hikes in many kinds of merchandise, services and food.
The good news is that ethanol will likely soften the blow from Harvey because adding ethanol really stretches a gallon of gasoline. Even the federal Environmental Protection Agency acknowledges that fact. Last week, EPA issued a waiver to relax the rules so E15 may be sold immediately in Nebraska and 37 other states.
According to the Nebraska Ethanol Board, under normal circumstances, reformulated gasoline and low volatility conventional gasoline (winter blends) can be sold only after Sept. 15. The short-term waiver issued on Thursday ensures an adequate fuel supply throughout the country and might even depress a bit of the price increases we're seeing at the pump.
By blending more ethanol, the fuel supply can go farther, especially if flex-fuel vehicle owners fill up with E85 and drivers with a vehicle 2001 or newer choose E15, said Jan tenBensel, vice chair of the Nebraska Ethanol Board.
"One of easiest things we can do to help with Hurricane Harvey recovery is use more ethanol," tenBensel said. "By using our homegrown, renewable fuel, we can allow petroleum to be diverted to areas that are in a greater need, which also helps mitigate price hikes."
If you'd like to boost the volume of ethanol in the fuel you're buying, you can locate higher blends of ethanol throughout the state by visiting www.AmericanEthanolNE.org or www.HuskerFuel.com. Drivers who have been sheepish about burning ethanol in their vehicles now have an opportunity to get better acquainted with the renewable fuel and its lower price compared to unblended fuel without ethanol. Until refineries are fired back up, you can save a few dollars while helping the nation stretch its fuel supply.