Reports of gasoline selling for under $2 per gallon are starting to crop up, especially in the Midwest. As of this morning, AAA was showing the average price in Michigan as below $2.00 per gallon, with Missouri and Oklahoma right at $2.00 per gallon, and a few other states just a few pennies higher. According to AAA, many cities are averaging below $2 per gallon with prices in some cities close to $1.90 per gallon. Yet, with the latest U.S. average price at $2.23 as of January 15 (according to EIA’s weekly retail price survey), not everyone is seeing prices this low, so it’s no surprise that people in other parts of the country are wondering when they might see gasoline being sold for under $2 per gallon.

It generally takes a couple of weeks for changes in spot prices (the price at which gasoline is bought from refiners) to begin to be reflected in retail prices, and from four to eight weeks for the full impact to be passed through to the pump, barring intervening changes or shifts in spot prices. Given this time lag, it is fairly straightforward to project the direction of prices over the next week or two. That said, prices may continue to fall nationally, such that they could get close to $2 per gallon by late January or early February.

Controversy over the benefits of using corn-based ethanol in vehicles has been fueled by studies showing that converting corn into ethanol may use more fossil energy than the energy contained in the ethanol produced. Now a new MIT analysis shows that the energy balance is actually so close that several factors can easily change whether ethanol ends up a net energy winner or loser.

Regardless of the energy balance, replacing gasoline with corn-based ethanol does significantly reduce oil consumption because the biomass production and conversion process requires little petroleum. And further MIT analyses show that making ethanol from cellulosic sources such as switchgrass has far greater potential to reduce fossil energy use and greenhouse gas emissions.

GRAND FORKS, N.D. — The Centers for Renewable Energy and Biomass Utilization at the University of North Dakota Energy & Environmental Research Center (EERC) are partnering with ICM, Inc., one of the lead companies involved in designing and building ethanol plants, to improve the production process for ethanol and further advance its use through nontraditional feedstocks that go beyond corn. The EERC is developing a new technology to produce ethanol from biomass materials such as grasses, wood, and straw.

"Biomass ethanol is the future of ethanol production because biomass feedstocks, like wheat straw or switchgrass, require less fossil fuels to grow, harvest, and produce," said EERC Deputy Associate Director for Research, Chris Zygarlicke. "It also allows us to utilize more marginal land, such as grasslands, rather than precious acreage devoted to food crops like corn or soybeans. In this way, ethanol production from biomass does not negatively affect the livestock and food industry."

The Energy & Environmental Research Center (EERC) at the University of North Dakota has been awarded approximately $5 million from the U.S. Department of Defense's (DoD's) Defense-Advanced Research Projects Agency (DARPA) for the development and demonstration of a new domestic bio-jet fuel for the U.S. military. The 18-month project will produce enough fuel to allow DARPA to demonstrate the fuel's usability in real-world combat scenarios.

"One of the greatest challenges in our nation is energy security for the U.S. military. This award is a significant opportunity to match the skills of the EERC with the military's needs," said EERC Director Gerald Groenewold. "This will also expand the EERC's capabilities in tactical fuels and allow us to demonstrate the effects of recently developed technology to convert fuels made from indigenous resources that can replace imported oil," he said.