A new study conducted by energy policy expert, Philip K. Verleger, has found that consumers save approximately 22 cents per gallon of gas thanks to the Renewable Fuel Standard.
The Renewable Fuel Standard (RFS), enacted in 2005, is an American Federal program that requires transportation fuel sold in the United States to contain a minimum volume of renewable fuels. The volume requirements increase each year, reaching 36 billion gallons by 2022. Each type of renewable fuel must emit lower levels of greenhouse gases than the petroleum fuel it replaces.
Verleger uses an econometric model to look at the impact of the Renewable Fuel Standard on crude oil and gasoline prices from 2015 to 2018. The study concludes that blending approximately 1 million barrels per day of ethanol into U.S. motor fuels has lowered average price of crude oil by $6 per barrel. This reduction has cut retail gasoline by $0.22 relative to what the price would be if there had not been any biofuel in the gasoline supply. Verleger estimates that the retail price of gasoline today would be well over $4 per gallon if renewable fuels were removed from the supply mix.
You can find the full study here.