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Greed alone doesn't explain why ethanol was able to come down in price and diesel stayed high.
As a greedy (self-interest motivated) person, I wouldn't sell the ethanol I produced if I couldn't turn a profit. That would then drive the price of ethanol higher. On the other hand, if I could sell E85 for $1/gallon and make a profit while gasoline prices are low, then surely I could make a killing when gasoline prices are high without having to increase my prices by very much.
There should be very little linked between the price of E85 and gasoline. The fixed costs of growing corn and distilling ethanol won't vary by much with regard to fuel prices.
The explanation from the EIA for diesel fuel prices being more than gasoline doesn't make any sense either. It says refining capacity limits production, but diesel has been more expensive since 2004; there has been 11 years to ramp up refining capacity in response to demand. It also says global demand for diesel has risen, however diesel is refined from a barrel of crude oil, which has recently had a large drop in price. This should drive diesel prices lower along with all other distillates. Finally, the EIA says diesel is taxed at $0.06 more than gasoline and has extra expense in sulfur removal. That extra $0.10 in cost over gasoline doesn't explain why diesel is $1.00 more expensive.
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