Does E85 fuel save you money or cost more?

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I recently bought a vehicle that has FlexFuel capability and can use E85 (mostly ethanol) fuel. But can you guess whether it is more economical for me to use E85, or regular gasoline? Read the SAS analysis below to see if you guessed right!

I've been the happy owner of a 1995 Jeep Cherokee for 21 years. I used it to haul DJ gear, pull trailers, and transport kayaks & canoes on top. It never left me stranded, and has been my favorite vehicle.

cherokee

But, as my hobbies have grown, so have my vehicle needs. The Cherokee just won't hold all the DJ gear I want to take when I play music for a car show. And I don't think it could safely tow my 30-ft boat. And although it's never broken down, it's getting too old for me to trust with a high degree of certainty on a long trip. So I studied the used car market for several weeks, and decided that a Chevrolet Suburban would be the perfect special-purpose vehicle (to go along with my Prius daily driver). So I got a 2007 Suburban LS 4wd, with the 5.3 liter v8 engine - it's got twice the space & twice the horsepower of my Cherokee, and is 1/2 the age!

suburban_2007

The Suburban is FlexFuel capable (meaning it can use E85 fuel), and the previous owner mentioned that he had recently filled it up with E85, since it cost less than $1.50/gallon (about 30 or 40 cents cheaper than regular gasoline). But I wondered if it was really a better deal, since you get fewer miles per gallon with E85. So of course I decided to analyze this question using SAS software ...

The Analysis

First, I needed to collect a bit of data. I went to the fueleconomy.gov website and looked up the mpg for my Suburban using regular gasoline and E85 (16 & 12 mpg). I used gasbuddy.com to find the price of regular gasoline near me in the 27513 zip code area ($1.84/gallon at the Shell station nearby). Gasbuddy doesn't track E85 fuel prices, so I went to the government's alternative fuels database center, and found the closest station selling E85 (which was a Sheetz station in Raleigh). The database didn't list prices, so I called the Sheetz station, and the manager was kind enough to go outside and check today's price for me - $1.49/gallon.

Now let's analyze the data. First I plotted the fuel prices. I don't usually get 'cute' with my graphs, but I decided to fill the E85 bar with a corn-kernel image, so you can easily tell which bar represents the corn/ethanol fuel. We knew that E85 was cheaper than regular gasoline based on the price numbers, but the graph helps your brain visually compare them on more of a percentage basis.

e85

Next I plotted the miles per gallon. We knew that 16 was more than 12, but the graph helps us see "how much more."

e851

And finally, I calculated the cost to drive a mile (by dividing the two numbers in a data step), and plotted results. This shows that it is about 1 penny per mile cheaper to use regular gasoline instead of E85. Therefore, based on end-user cost alone, I think I'll just use regular gasoline. :-)

e852

Does E85 fuel save you money or cost more? #analytics Click To TweetHopefully you've enjoyed this simple analysis, and perhaps learned a few new SAS tricks. Feel free to download the code to see how you can create similar graphs. While you're going through the code, I invite you to watch the Beverly Hillbillies episode where Granny uses her moonshine (ethanol) in the old truck, to beat Jethro's hotrod.

Now it's your turn - what other analyses would you recommend performing to more fully compare E85 to regular gasoline, to find out the "true price" and the global impact, etc?

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About Author

Robert Allison

The Graph Guy!

Robert has worked at SAS for over 25 years, and is perhaps the foremost expert in creating custom graphs using SAS/GRAPH. His educational background is in Computer Science, and he holds a BS, MS, and PhD from NC State University. He is the author of several conference papers, has won a few graphic competitions, and has written a book (SAS/GRAPH: Beyond the Basics).

15 Comments

  1. gordon Keener on

    It would be interesting to see your actual MPG in your truck, with and without E85, to see if your error bars overlap. But, then, it's easy for me to spend your money. :-)

    • Robert Allison
      Robert Allison on

      5 tanks of regular, and 5 tanks of e85 should do nicely, to gather more data!
      I'll let you know the address to send me a gas card! ;)

  2. Does the spread between E85 and regular 87 gas stay the same? If not there may be a price point where the E85 becomes the better buy.

    • Robert Allison
      Robert Allison on

      I haven't really tracked the prices, but I would assume that the stations probably price e85 a certain % lower than regular gasoline (similar to the reduction in mpg) to keep it 'competitively priced'(?) Perhaps someone with better insight into that can provide a more definitive answer! :)

  3. Your calculation make pretty good sense. E85 is subsidized to such an extent that it is nominally price-competitive to gasoline. This is of course based on a wide range of car models, so not all cars will get exact cost parity. Without subsidy to corn farmers and processors, E85 would be fairly expensive.

    The lower gas mileage of E85 is based on the fact that ethanol is equivalent to pre-oxidized gasoline and therefore has lower caloric content. Note that because of the oxygenation, the octane number is quite a bit higher (usually >100), so it's good for cold starts in the winter.

  4. Are maintenance costs affected by use of the E85 - does it burn cleaner in the engine, requiring less replacement of fuel filters and engine cleaning?

    • Robert Allison
      Robert Allison on

      Hmm ... good questions! I read somewhere that e85 burns a little more cleanly, but since you have to burn more of it, then it's about equal (not sure where I read that, and not sure if it's 100% accurate, so take that for what it's worth!) :)

  5. I will start with I work in the ethanol industry, but there are few things to consider here. I have been driving on E85 since 1991, long before it was sold at retail. I have logged more than one million miles on E85.

    Flex fuel vehicles (FFVs) are optimized for gasoline. They are allowed to run on E85, which is the reason for the MPG loss. Most argue that it purely based on the BTU (heating value) of the fuel, but that is not exactly correct. If you optimized an engine on E85, it would get better MPG on E85 than gasoline. If you want to see the latest discussions on this, search Google for the discussion on the automakers hitting their 54.5MPG requirement using higher ethanol blends. Ford has led the testing thus far.

    The performance associated with E85 is different for each driver and vehicle. Personally, I have experienced as little as a 7% loss to a 28% loss. I quickly got rid of the 28% vehicle. :-)

    The price of E85 is NOT subsidized. That disappeared in 2011, it was called the Volumetric Ethanol Excise Tax Credit (aka VEETC).

    E85 is not always 85% ethanol. E85 is seasonally adjusted to help with starting and driveability. In the winter months, E85 can get as low as 70% ethanol. The more hydrocarbon, the higher the BTUs and likely the higher MPG. If you want to see the schedule for your area, you can see it here: http://www.afdc.energy.gov/uploads/publication/ethanol_handbook.pdf

    You should require less oil changes running E85. Let the GM computer tell you your needed interval.

    Each station has its own supply chain and marketing strategy for pricing E85. You can visit E85prices.com to see the various price spreads in the country and in your area. I encourage you to submit the prices you see and help others find the least expensive E85 in their market.

    The more you can maintain a constant fuel the better the MPG will be. The computer adjusts, but not instantly. If you jump back and forth from regular unleaded to E85 with each tank, neither will ever be the best possible.

    Hope that helps. Enjoy the weekend.

    • Robert Allison

      One concern - when you raise the horsepower of the engine, are the other components (such as transmission, trailer hitch, etc) able to withstand the extra power.

  6. Hmmm, very interesting information..... I just bought a 2012 Cadillac SRX and it takes the e85, I couldn't find e85 anywhere the first 2 days of having it, so running it on regular gas I was getting 19 MPG, I finally found one gas station that sells it in my area (about a half hour away), now I always use it, but my MPG hasn't changed at all, it is still 19. So I was thinking it was alot better to use it. Do you think your MPG difference is because you have a massive truck? Are any other readers with smaller SUVs like mine getting a difference?
    Thanks for all your information, very interesting.

  7. Many of the miles my GMC 1500 5.3 are short trips, 40 minutes or less with numerous stop and starts. I don't really keep track of the fuel/mileage for mpg, but I do notice how often I fill and that doesn't vary regardless of which fuel, so I'm very happy to save the 60 cents a gallon at my local Cenex co-op.

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