Department of Economics
Within the context of current technology and the relatively cheap alternative fuel supplies, gasohol is not economically feasible. It could not be produced for use as a substitute for gasoline without subsidies. And, subsidies of the magnitude required, cannot be justified by benefits accruing to farms or to any other economic interests. A gasohol production program in South Dakota would increase the income of South Dakota farmers by only about 11 cents per dollar of subsidy necessary to keep the program financially solvent. If farm income support or stabilization would be a goal of such a program, direct income payments to farmers would be much more efficient. A gasohol program would not have a significant positive impact on the national energy balance or on the need for petroleum imports. Both of these conclusions would remain valid even if gasohol were mandated for use nationwide. Within the foreseeable future it is unlikely that changes in the price of gasoline or of alternative energy sources will be of such magnitude as to make gasohol feasible economically.
ethanol production feasibility, ethyl alcohol, gasohol
South Dakota Agricultural Experiment Station, South Dakota State University
Daves, T. E., "Gasohol: Economic Feasibility in South Dakota" (1979). Research Bulletins of the South Dakota Agricultural Experiment Station (1887-2011). 663.