ORLANDO -- Florida, one of the nation’s biggest gasoline consuming states, is now a key battleground for ethanol demand, the Orlando Sentinel reports. 

Tom Kloza, chief oil analyst for the Oil Price Information Service, predicts that ethanol-blended gasoline E-10 will become commonplace at stations throughout Florida in 2008.

“I suspect it will be the default grade for Florida by spring or summer,” Kloza said this week from his New Jersey office.

Economics and consumer demand are helping power the trend, with the pump price of regular gas soaring to $3 a gallon and beyond this year.

A gallon of ethanol now costs about 40 cents less than a gallon of gasoline, making an ethanol-gas blend slightly less expensive than regular gas.

That can mean fatter profit margins for gas retailers, but it could also translate into cheaper gas for motorists, Kloza said. Ethanol also has some clean-air qualities because of its higher octane.

“In a business where margins are often measured in single cents, the ability to save 6 or 7 cents on wholesale can make the difference from a break-even operation to a fairly prosperous operation.”

Hess Corp. spokesman Rick Lawlor told the newspaper that the company recently brought E-10 to all 60 of its Orlando locations and plans to have ethanol-blended fuel available in all of the state’s 375 locations by the end of year.

Meanwhile, some critics say ethanol is not all it is cracked up to be, is more costly than gasoline without hefty government subsidies, and yields less energy than petroleum-based gasoline. That means it takes a bit more ethanol in the tank to drive the same distance as a given amount of gasoline.