Cutting ethanol would raise gas prices

The blog GoodFuels has a great post detailing an analysis by Dr. Mark Cooper, director of research for the Consumer Federation of America.

Cooper concluded that slashing ethanol production, as requested by Texas but denied by the Environmental Protection Agency, would "increase gasoline prices substantially." Cooper's analysis was filed in response to a study prepared for the state of Texas by two oil economists, "who erroneously claimed increasing demand for gasoline and crude oil would lower prices."

Cooper criticized the claim made by economists that by reducing ethanol production, gasoline and diesel prices would fall as refineries increased processing of crude oil: The suggestion that increasing demand for oil will lower oil and gasoline prices is not only contrary to Economics 101 and what independent analysis by Wall Street firms, government agencies and academic institutions have concluded, but the study's authors do not provide one shred of evidence to support their strange argument.

To check out the full post -- and a link to Cooper's report -- click here.
Nebraska Corn Kernels mentioned this research here.