Does E85 save money?

A bargain?

A recent article by regular reader Bob Moffitt says that rising gasoline prices are making filling up with E85 an attractive alternative for owners of flex fuel vehicles.

Here in Minnesota, E85 is currently about 15-20 percent cheaper than conventional gasoline, according to E85prices.com, a user-fed site that tracks fuel prices. But ethanol also drives down gas mileage.

So if you fill up with E85, are you actually saving any money?

It all depends.

For instance, right now, according to E85prices.com, a gas station in Annandale, Minnesota, is selling E85 for $2.67 per gallon, and regular unleaded for $3.52. And let’s say we’re driving a 2010 Cadillac Escalade, with EPA estimated mileage (city/highway combined) of 15 mpg on gas and 12 mpg on E85.

That means your fuel cost per mile will be 23.5 cents per mile on gasoline, and only 22 cents per mile on E85.

But let’s suppose we’re in Watkins, Minnesota, where the prices are $3.01 for E85, and $3.54 for gas. And we’re driving a 2010 Pontiac G6 with a 6-speed automatic, rated at 26 mpg on gas and 18 mpg on E85.

Now, the fuel cost will be 13.6 cents per mile on gasoline, but 16.7 cents per mile on E85.

Your mileage, as they say, will vary. Drivers will save money using E85 when the price spread is high, and the difference in relative fuel economy for their car is low. The EPA calculates annual estimated fuel costs for FFVs, and while those costs are consistently higher for E85, for a lot of cars, it’s close to being even.

But those are also just estimates, and Moffitt says the EPA numbers don’t always pan out in real-world driving. For instance, he says, officials in Brooklyn Park, Minnesota, have been tracking mileage closely and are finding that city vehicles, primarily driven at low speeds, are getting the same mileage with E85 as they would with gasoline.

Also, the EPA estimates are based on 100 percent pure gasoline, not the 10 percent ethanol blend that is more or less ubiquitous in the Midwest. So, for most drivers, the mileage spread between regular and E85 won’t be quite as large.

Of course, individual consumers may have their own reasons for using E85, such as wanting to lower emissions. And some may just enjoy a psychological lift from paying $2-something per gallon instead of $3-something. Very few people reach for the calculator when they get to the gas station.

Of course, the best way to save money on fuel is to drive less in the first place. But that’s another topic for another day.

Photo by Ryan Thompson via Creative Commons

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