Through the Blend Wall or Not: Experts Weigh in on Ethanol Blends and the Future of Biofuels

, Senior scientist | November 25, 2013, 1:17 pm EDT
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How much ethanol can we use? Not as much as the corn ethanol lobby says, but considerably more than the oil industry wants you to think. The trench warfare between oil and corn ethanol interests over the future of biofuels policy distracts us from the more important questions. To understand the practical constraints facing the near term implementation of biofuel policy, it’s important to remember that there are 15 million flex fuel cars on America’s roads today capable of running on blends of 85 percent ethanol (E85) – it just isn’t broadly available. The implications reach beyond just corn ethanol.

Earlier this month Professor Bruce Babcock of Iowa State University and I presented a briefing at the U.S. House of Representatives and the Senate on what is popularly called the blend wall. This was timely because the blending constraints are key to the EPA’s analysis of how to move forward with implementing biofuel regulations. Regular readers of this blog will know that I am no great fan of corn ethanol. But biofuels policy is about more than corn ethanol, it’s about cutting oil use over the long term. To make that happen, we need the policy mechanisms to function effectively, which is why it is important to get this right.

The oil and corn ethanol industries are arguing over the suitability of E15 (a blend of 15% ethanol in gasoline) for various models of cars and other gasoline powered equipment. This is of little practical importance, because the fact is almost no one is selling this fuel and it is not likely to have a significant impact on biofuel use in the next few years. The real question now is about flex fuel vehicles (FFVs) and E85.

What is the blend wall anyway?

Almost all gasoline sold in the United States is blended with 10% ethanol today (also called E10). For better or worse, this is the status quo, and no one much expects it to change. The blend wall refers to the logistical and economic challenges of expanding the use of ethanol beyond E10.

Professor Babcock has evaluated the technical capability and economic practicalities of E85 use by the FFVs that are already on the road today. These vehicles could consume more than 6 billion gallons of ethanol as E85, if it were widely available and attractively priced. The problem is not the cars or the fuel, it is the gas stations. Professor Babcock found that with current availability of E85, 1 billion gallons is about the highest level of ethanol that could be consumed as E85. But with additional investment in E85 distribution infrastructure, this could rise significantly.

The Renewable Fuels Standard (RFS) is designed to support attractive pricing for E85 and it can also provide indirect financial support that makes investments in E85 distribution infrastructure attractive to gasoline station owners. Investments in fueling infrastructure will take some time to get on line, and people will only make these investments if they have confidence in the course ahead for biofuels policy. The EPA’s draft volumes under the Renewable Fuel Standard for 2014 suggest they don’t see much potential for E85, and if they finalize targets based on this assumption, it will discourage infrastructure investment and become a self-fulfilling prophecy.

Corn ethanol is safe – it’s cellulosic that is at risk

The other key point Professor Babcock made, and this is important, is that the future of the RFS has very little impact on the production of corn ethanol or the price of corn. The implications for advanced and cellulosic biofuels are far more significant.

My contribution to the briefing focused on the implications of the blend wall for advanced and cellulosic biofuels.

My first point is that we need to recalibrate our goals and expectations based on the reality that biofuel production is growing more slowly than anticipated. We don’t need distribution infrastructure to double biofuel use in the next decade, because unfortunately we will not have the cellulosic biofuels in such large quantities that soon. The total use of biofuels is likely to grow about 40% over the next decade. This pace can still keep us on a path to cut projected oil use in half in the next twenty years, but the rate of infrastructure deployment is much more manageable.

Which brings us back to the importance of the EPA laying out a realistic road ahead for the RFS.

Slow and steady wins the race (to cut oil use)

The oil industry has declared that there is no role for any ethanol beyond E10, or for the RFS at all. They have a vested interest in distracting us from looking at E85, and will stop at nothing to keep the debate focused on the limitations of E10. The corn ethanol lobby would like to pretend the infrastructure constraints are not real, and have been manufactured by the oil industry.

Because they won’t tell you, I will: the infrastructure challenges are real, but they are more like speed bumps, which require us to slow down – not stop.

To summarize, while it is prudent to cross the 10% blending threshold carefully, it is a speed bump rather than a brick wall. And if we park the policy in front of this speed bump it won’t have much impact on corn ethanol, but it will seriously curtail investment in the next generation cellulosic biofuels we need to realize the goals of the oil saving and climate goals of the RFS and the UCS Half the Oil plan.

I thought the topic was important to some people who could not attend the briefings, so we recorded our presentations and are posting them below. The written materials from which they draw are also included for your reading pleasure.

4 page policy summaries

The Economic Role of RIN Prices

Bruce A. Babcock, Sebastien Pouliot

How Much E85 Can Be Consumed in the United States?

Bruce A. Babcock, Sebastien Pouliot

RFS Compliance: Death Spiral or Investment in E85?

Bruce A. Babcock, Sebastien Pouliot

The Blend Wall and the Future of the Renewable Fuels Standard

Jeremy Martin

And technical papers

Price It and They Will Buy: How E85 Can Break the Blend Wall

Bruce A. Babcock, Sebastien Pouliot

Impact of Sales Constraints and Entry on E85 Demand

Bruce A. Babcock, Sebastien Pouliot

RFS Compliance Costs and Incentives to Invest in Ethanol Infrastructure

Bruce A. Babcock

Impact on Corn Prices from Reduced Biofuel Mandates

Bruce A. Babcock, Wei Zhou


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  • D. Meisner

    It would be great for you to include a definition of the term “blend wall.” I think I correctly surmised it is the challenge of moving past 10%, but am not sure that’s correct. I’m sure you assume everyone knows what it is, but we all do not.

    • Thanks for your comment. You are exactly right, the blend wall refers to the set of challenges associated with using more than 10% ethanol blended into gasoline. Since I think challenges are more manageable than the wall analogy would suggest, I tend to use other language. I’m sorry if it caused confusion. I will try to do a better job clearly defining any jargon next time around.