Ethanol's Mandated Use as a Gasoline Additive May Be Contributing to Higher Gas Prices, Says Institute for Energy Research

HOUSTON, TX July 3, 2006; As America celebrates the 4th of July, politicians in Washington are talking about a different kind of independence: With gas and energy prices soaring -- and also driving up the costs of travel, food, and manufactured goods -- there is talk of energy independence. Tom Tanton -- a senior fellow with the Institute for Energy Research -- explains why we're seeing such a hike in the price at the pump.

He says, "The causes of higher energy costs have their roots in simple economics: Increasing global demand for oil and gas -- without increasing supply -- equals higher prices."

However, according to Tanton, recent policy decisions -- such as Congress' mandate that ethanol be used as an additive in gasoline -- are intensifying the problem.

"The switch-over to ethanol gas additives has created an additional set of demands that are outpacing supply, and driving up prices to the extent of 20 to 80 cents more per gallon -- and even more when consumers pay their taxes in April. Not to mention the fact that, in many cases, ethanol requires more energy to produce than it generates. Consumers also need to recognize that using ethanol reduces their mileage: The more they use, the shorter their trip," he adds.

For more information, please visit www.instituteforenergyresearch.org.