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Ethanol Tops 10% Blend Wall

By Chris Clayton
DTN Ag Policy Editor

OMAHA (DTN) -- The Renewable Fuels Association declares the 10% ethanol "blend wall" was broken through last year, based on federal numbers released by the U.S. Energy Information Agency.

The blend wall has been a symbolic cutoff between the renewable fuels industry clamoring for higher market share, and the petroleum industry that has fought protectively to keep biofuels from taking a higher share of the consumer fuels market. The two industries have fought this battle in courts, Congress, the EPA regulatory record, and in marketing material.

As RFA noted, ethanol mainly derived from corn was contained in 10.04% of gasoline in 2016. Last December, ethanol hit a 10.3% rate.

RFA noted that since last October, weekly ethanol demand has topped 10% in 13 out of 20 weeks. In early January, ethanol hit a record of 10.41% of fuel volume.

The RFA stated that growth in 15% ethanol blends, as well as midlevel sales of 20% to 50% ethanol, and the even higher flex-fuel blends, all contributed to the boost in ethanol use last year. Those higher level blends accounted for somewhere between a range from 450 million gallons to as much as 1.7 billion gallons of fuel use last year. RFA extrapolated those figures from statements that unblended petroleum gasoline sales account for roughly 5.3 billion gallons, according to the American Petroleum Institute's claims.

RFA also stated that the data released Wednesday undermines claims by the petroleum institute that the gasoline market cannot use more than 9.7% overall ethanol blend. RFA notes that the average ethanol blend has not been below 9.7% since April 2015.

The statistics put together by the Renewable Fuels Association are meant to undercut the American Petroleum Institute, which has its own set of spread sheets on its website refuting the Renewable Fuels Standard and higher ethanol blends. API argues petroleum production is up while overall fuel use is declining due to more efficient cars. Thus, there's no room for expanded ethanol use in the gasoline market.

Just Monday, API posted on its website "100 Days of Energy," regarding energy policies the fossil fuels industry would like to see the Trump administration change. Regarding its key points on the RFS, the 100 Days of Energy report states, "Mandating additional levels of ethanol will push against the blend wall, and require more ethanol than can be safely blended as E10 fuel." API also states 85% of vehicles were not designed for higher blends, such as E15," even though EPA has approved 15% ethanol for all passenger cars, light trucks and medium-duty vehicles from 2001 and newer.

As DTN has reported, groups and state officials in some states, notably South Dakota, are pushing for more use of 30% ethanol. Groups such as the Urban Air Initiative argue cities would have cleaner air if EPA removed the prohibition against midlevel ethanol blends and require ethanol to meet higher-octane blends to replace carcinogenic aromatics often used by petroleum refiners now.

RFA report on 10% blend wall: http://www.ethanolrfa.org/…

100 Days of Energy report: http://www.api.org/…

Chris Clayton can be reached at Chris.Clayton@dtn.com

Follow him on Twitter @ChrisClaytonDTN

(AG/BAS)

04/20/17
News Source: 
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