The final holiday weekend of summer is here — and gasoline prices have shot up 30-cents a gallon in parts of Iowa just in the past week before Labor Day weekend. Triple-A-Iowa reports the statewide average is $2.93 a gallon for self-serve unleaded, when prices were in the two-60s last weekend. Iowa’s current average is well above the national average of two-77 a gallon.
Mary Hutzler, with the Institute for Energy Research in Washington, D.C., says pump prices are often based on local rivalries and the costs to run each individual station. Hutzler says, "That can differ for a number of reasons, by the locality and the competition, but also, it depends on how close you are to refineries and refinery operations as well."
Iowa leads the nation in ethanol production, making almost two-billion gallons of the fuel per year. Iowa’s 29th ethanol plant went online in the past week and 18 more are planned or under construction statewide. Hutzler says Congress is considering a mandate that a certain amount of ethanol would need to come from –not corn– but "advanced biofuels" like cellulosic ethanol.
Hutzler says: "There are problems from the standpoint that the cellulosic ethanol technology is not commercially viable today. It has a number of problems that need breakthroughs and people are saying those breakthroughs are going to be decades away so Congress has mandated that we produce three-billion gallons from that technology by 2016." The U.S. Senate has proposed a bill to update the mandate on renewable fuels to require seven-point-five-billion gallons by 2012. Hutzler predicts that will happen long before then.