Arriving at the ethanol blend wall
AgMRC Renewable Energy & Climate Change Newsletter
November 2011

Dr. Robert Wisner
Professor Emeritus
Iowa State University


A recent report by the Environmental Protection Agency (EPA) indicates the U.S. national average blend of ethanol with gasoline for the last several months has slightly exceeded 10% . For the ethanol industry,10% is a special number believed to represent the “Blend Wall” at which the domestic ethanol market becomes saturated or almost saturated. The saturation point stems from the 10% ethanol-gasoline blend that is allowable for all gasoline-powered vehicles regardless of age. A small additional ethanol market is available through sales of E-85, a blend of 70% to 85% ethanol and 15% gasoline. However, this market is limited by (1) the very small percentage of retail gas stations that sell E-85, (2) the limited number of flex-fuel vehicles (the only type EPA has approved for its use), and (3) lack of price competitiveness of E-85. In many E-85 stations, E-85 has not been priced low enough relative to gasoline to offset the sharp decline in fuel mileage that occurs with E-85.

http://www.agmrc.org/renewable_energ...11&issueID=118