Ethanol supply deemed adequate by U.S. forecast

The Energy Information Administration has backed off some of its earlier predictions regarding the impact of gasoline refiners' switch from methyl tert-butyl ether (MTBE) to ethanol on gasoline prices at the pump. In its short-term energy outlook for April, EIA says consumers can expect prices to be 25 cents per gal higher on average this summer compared with a year earlier. Attributing three-quarters of the increase to the surging cost of oil, EIA says greater demand for ethanol will likely affect gas prices by "just a few pennies." In February, EIA expressed serious concerns about the adequacy of ethanol supplies and warned that gas prices could surge on the East Coast and in Texas as MTBE is rapidly phased out. "This report from EIA is a much more accurate reflection of what is going on in the gasoline and ethanol markets as refiners voluntarily eliminate MTBE from the nation's gasoline supply," says Renewable Fuels Association President Bob Dinneen. "With oil prices near $70 a barrel and refining capacity still struggling to come back on-line, it's clear that those factors have far more to do with consumers paying more at the pump than the increased use of ethanol [does]."