50 billion reasons
The final step is easy. The EIA reports that the average price of Brent crude in 2012 was $111.65 per barrel. That puts the final savings from displaced gasoline at $50,928,070,175 — all thanks to ethanol. To put that in perspective, that’s roughly the size of Apple Inc. (NASDAQ:AAPL)‘s share-repurchase program, the financial cost of Hurricane Sandy, or the amount Russia wants to spend on its space program by 2020.
As promised, here’s the back-of-the-napkin calculation:
See? It isn’t that complicated after all!
Foolish bottom line
Boosting America’s trade balance — and the bottom lines of refiners — is just one piece of the complicated jigsaw puzzle called ethanol. Why is it the default first-generation biofuel? Ethanol fermentation is a widely known and easily understood process. In addition, America has no shortage of corn (most years). I don’t believe it’s the best alternative fuel that we can be making from corn starch, but it is the best that we have until science bails us out with second- and third-generation fuels. Until then, we can enjoy a $50 billion-per-year discount on imported oil. Thanks, ethanol.
The article 50 Billion Reasons to Support Ethanol originally appeared on Fool.com and is written by Maxx Chatsko.
Fool contributor Maxx Chatsko has no position in any stocks mentioned. Check out his personal portfolio or his CAPS page, or follow him on Twitter, @BlacknGoldFool, to keep up with his writing on energy, bioprocessing, and emerging technologies.The Motley Fool has no position in any of the stocks mentioned.
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