What should E85 cost? 11/24 edition

I'm calculating an E85 price of $1.60 to $1.65, which would be comfortably below gas at $1.74.

Meijer obviously has a high cost tank of E85 in the ground. They're unwilling to drop the price to just get it sold off.

Daily Meijer update

E85: $1.99
87 Octane: $1.74
93 Octane: $1.94

I'm switching to 93 octane on the next tank. I need to document mileage on 93 anyway.

Hits keep on coming

Meijer still has E85 at $1.99. Regular is down to $1.76, and PREMIUM is a mere $1.96.

Premium is now cheaper than E85. Unbelievable.

I have to think that sales of E85 are negligible. That is probably why the price of E85 is stuck at $1.99. It's the same E85 in the tank from weeks ago!

Where prices have been...

Negative spread grows

Seen at Meijer this morning...

E85: $1.99 a gallon.

87 Octane gas: $1.90.

The hits keep on coming!

Tank #25

I filled up at Meijer the other day.

3.017 gallons of E85 @ $1.99 a gallon.

10.549 gallons of 87 @ $1.94 a gallon.

2.834 gallons left from last tank @ 19.36% ethanol.

Ethanol content of tank #25 is 22.66%.

Tank #24 ended with 22.8 mpg at 27 mph average speed.

Worse than parity!

E85: $1.98
Regular gas: $1.95

I have to think that Meijer's E85 sales are down to nothing.

NEAR PARITY!

Regular Gas: $2.00.

E85: $1.99

Youch.

Price spread is simply awful!

Regular gas is $2.07.

E85 is $1.98.

Ouch.

Price spread increases a bit

Of course, the very afternoon after I buy E85 at $1.99, Meijer has it at $1.86. The spread increased to 30 cents as well.

For the first time since I came up with my spreadsheet to estimate how much E85 should cost, Meijer is selling it for LESS than my estimate of fair value.

Tank #24

I filled up at Meijer this morning.

I got 2.5 gallons of E85 at $1.99 a gallon.

I got 10.975 gallons of regular at $2.21 a gallon.

I had 2.89 gallons left from the last tank at 10.57% ethanol.

The new ethanol content is 19.36% ethanol, and about 89.5 octane.

Tank #23 finished with 25.2 mpg at 29 average mph.

Price spread continues its decline

Meijer is down to 22 cents on their spread. Their E85 price actually rose from $1.90 to $1.99, and gas continues its decline, now down to $2.21.

Not good.

Fun with multiple regression

So I've added datapoints for 10% and 15% ethanol for my gas mileage and average speed. I threw out Alcohol's data, so now I've got data purely for my car. I've redone my regressions for mpg as a function of ethanol % and average speed.

It turns out that ethanol content is a statistically significant factor in mpg.

The next step was to take the regression equation and calculate MPG for various ethanol contents.

Then I looked at what price spread you need to make it worth it to use ethanol.

I found that it was anywhere from 57 to 72 cents. It's a spread that's quite a bit more than you get at Meijer!

Ethanol Producer "Poet" makes Forbes magazine

Here.

Interesting company.

I recently got a free subscription to "ethanol producer" magazine. A lot of the things in the Forbes article were in there: separating the 3 parts of the kernel, etc.

E85 is $1.90 at Meijer...

...as of last night.

Not good. I'm all for cheap gas, but according to my calculations, E85 should be maybe $2 a gallon.

Somebody is losing money on this. I'm guessing that there is excess inventory (of gasoline too). Probably the ethanol producers are taking it in the shorts. Verasun is in barkruptcy, I believe.

I might top off with E85 tonight. Stop the experiment with 87 octane gas (LTFT and mpg are more or less know at this point!). Get back on the wagon.