In Ohio, Unity Biofuels has debuted a technology to permit blending of ethanol and gasoline in the pump. Currently, ethanol is blended into gasoline at the terminal. At stake: under US law, the $0.51 ethanol excise tax credit goes to the blender: typically a major oil company that is blending fuels. Using the Unity system, retailers can capture the blending credit and either retain or pass along in savings to their customers. With denatured ethanol quoted on the CBOT at $2.35 and gasoline at $2.89, the potential does not appear strong for passing along additional savings to customers, but a theoretical price spread could be created between E85 and gasoline (on a wholesale basis) of 32.1 percent, more than the fuel economy difference reported by AAA of 28 percent between E85 and gasoline, making E85 competitive with G100 gasoline and even more competitive with E10.
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