By BRENT MARTIN
St. Joseph Post
An official in the ethanol industry brushes aside suggestions the flood has caused gas prices to rise, because it shut down ethanol plants and disrupted rail shipments of ethanol.
CEO Geoff Cooper with the Renewable Fuels Association acknowledges a decrease in ethanol production has played a role, but contends the oil industry is just looking for an excuse for a 60-cent rise at the pump since the beginning of the year.
“Not surprisingly, the oil industry is trying to hide its role in the gas price spike and they’re looking for scapegoats and so of course they’ve been trying to suggest that flooding in the Midwest is to blame, because it affected rail shipments of ethanol,” Cooper tells KFEQ Farm Director Melissa Gregory.
Cooper says ethanol makes up only 10% of the fuel supply. He says oil prices have gone up, which has caused gas prices to go up.
Some oil industry executives have claimed the flood shut down ethanol plants and disrupted rail shipments in the Midwest, drastically reducing ethanol supplies.
Cooper says that is true, but isn’t the reason prices at the pump have gone up.
“If you really want to know what’s driving gas prices, you really don’t need to look any further than what’s happening in the crude oil market and in the refining sector,” according to Cooper. “A barrel of oil today is about $20 more expensive than it was on January 1st. So, we’ve seen about a 40% increase in the cost of a barrel of crude oil and that is by far the largest cost involved in making gasoline.”
Cooper says you simply cannot blame the flood for high gas prices.
“The disruptions in ethanol production and distribution because of the flooding have played a minor role in the higher gas prices, but if you really want to know what’s driving the majority of the increase, it’s what’s happening in the crude oil and refining sector,” Cooper says.
Cooper says the flood caused a temporary disruption in ethanol production, which he says has since been alleviated.