Larry there is a subsidy somewhere in the chain because we are not paying the full price for it at the pumps. It may be just the taxes are reduced for it, but that is why EtOH gas is cheaper at the pump than straight gas in Iowa, but it is more expensive than straight gas in noncorn states.
Brent, just a guess here, but I'm thinking it's probably cheaper in corn states like Iowa because that's where most ethanol is produced. It's also cheaper in WI, where--interestingly enough, considering that Iowa grows way more corn--you have to look for a station that sells regular unleaded without ethanol. (Even harder to find non-ethanol regular in MN.) At a lot of stations in WI, your choice is either E-10 or else the high octane non-ethanol stuff, which is maybe 50 cents/gal more expensive. In Iowa, it's always been the case that you could get either E-10 or regular no ethanol unleaded at virtually every station in the state, and minimal difference in price.
Could be there's some sort of state subsidy . . . but the federal subsidy for ethanol went away several years ago.
