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Biofuel Boondoggle
We’ve Hit the Blend Wall

If you fill up at a gas station in the U.S. sometime this week, chances are you’ll be pumping gasoline blended with 10 percent ethanol by volume (E10). As the EIA reports, nearly all American gasoline is now E10, the result of nearly a decade of biofuel mandates that have required refiners to blend increasing amounts of ethanol into fuel:

Blends of petroleum-based gasoline with 10% ethanol, commonly referred to as E10, account for more than 95% of the fuel consumed in motor vehicles with gasoline engines. Ethanol-blended fuels are one pathway to compliance with elements of the federal renewable fuel standard (RFS). The total volume of ethanol blended into motor fuels used in the United States has continued to increase since 2010, albeit at a declining rate of growth. Meanwhile, the use of ethanol-free gasoline (E0) by fuel consumers has declined.

The near ubiquity of E10 matters, because many older car engines can’t run on higher ethanol blends, which effectively means we’re currently blending all the ethanol that’s possible to blend into the national fuel supply. This is the so-called “blend wall,” and it sets a very real limit to the biofuel boosting ambitions set out by the 2007 Renewable Fuel Standard (RFS). The RFS initially envisioned ratcheting up ethanol mandates year after year, but those quotas have had to be relaxed recently, partly because of the blend wall.

If we want to blend more ethanol, we’ll either need to consume more gasoline as a nation (cheap gas prices and the resulting spike in SUV sales may help here), or as the EIA details, we’ll need to start producing more higher ethanol blends that can only be used by newer cars:

With nearly all U.S. gasoline now being sold as E10, the only way to increase ethanol use in the motor vehicle fleet is to adopt fuel blends containing a higher volume of ethanol, such as E15 and E85. However, not all gasoline-powered vehicles can use these fuels. The U.S. Environmental Protection Agency (EPA) has issued a partial waiver allowing the use of E15 in model year 2001 and newer vehicles. Fuels marketed as E85, which contain between 51% and 83% ethanol by volume, can only be used in flex fuel vehicles. Recent EIA congressional testimony on the RFS program estimates that flex fuel vehicles make up about 7% (16.3 million) of the current on-road fleet of light-duty vehicles in the United States.

But the EIA concludes that sales of these higher ethanol blends “remain very limited because of a variety of economic, environmental, and distribution system challenges.” The blend wall is not so easily dismantled.

So we’re left with a system of mandates that’s now stymied by chemistry. Now seems as good a time as any to take stock of what the RFS has accomplished: it has raised global food prices, starving the world’s poor; it costs drivers billions at the pump every year; it’s killing wild bee populations; and it isn’t even green. Let’s end this boondoggle, the sooner the better.

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  • Kevin

    There also the issue that they deliver substantially lower MPG and hence are an even worse deal for consumers.

  • FriendlyGoat

    Corn is grown apparently in 41 states. You can look here for a table of how much and where:
    http://beef2live.com/story-states-produce-corn-0-107129

    • f1b0nacc1

      Interesting chart (thanks for sharing). Of course the top four states in 2015 produced more than the next 37, so production is a bit ‘concentrated’…

      • FriendlyGoat

        Indeed. But we all wonder why we are still saddled with RFS and I just find it hard to believe Congress wants to be seen as against corn growers, even though the real output is concentrated.

        • f1b0nacc1

          The RFS is a perfect example of crony capitalism at work, and an excellent illustration of the danger in too much government intervention. Here is a policy that raises food prices, distorts the economy, damages agricultural output (benefitting large agribusinesses at the expense of small farmers I might add), has huge negative public health impacts, and with all that doesn’t even help (it actually hurts!) the environment. Yet because of the overlarge impact of a few early primary states and the aggressive lobbying of agribusinesses that make a fortune at our expense, it is able to be imposed and sustained. Government intervention is the problem here, for without it, there would have been nothing for the agribusinesses to lobby for, nothing for the Midwestern corn states to agitate for.
          I am glad that we agree that the RFS is such a outrage, and that it should be abolished….

          • Andrew Allison

            You failed to mention the outright bribery* of our so-called “representatives”: http://www.taxpayer.net/library/article/updated-political-footprint-of-the-corn-ethanol-lobby
            *a benefit (as money) given, promised, or offered in order to influence the judgment or conduct of a person in a position of trust (as an official or witness) — compare kickback.

          • f1b0nacc1

            Of course it is….but that only makes my point. Want to reduce the influence of money in politics, make it less profitable. When ADM can make tens of billions with a few millions in lobbying expenses, they would be insane not to. When the government has so little influence that the same millions in lobbying would only bring back, say 100s of millions in return (with some risk), then the influence will decline, and it will make more sense to spend the money on business, not bribes.

          • Andrew Allison

            Paying a lobbyist to plead one’s case is one thing. Outright bribery, er campaign contributions, quite another (the link lists bribes, not lobbying expenses). I suspect that public financing of campaigns and banning special interest contribution (from unions as well as corporations) would cost us less than the present cesspool.

          • f1b0nacc1

            As long as government policy can swing billions of dollars to the ‘winners’, people will find a way to influence the government. Whether it is outright bribery (which isn’t terribly common, though it certainly does happen, pace the SCOTUS’s recent embarrassing decision) or something more subtle, the idea that you can drain the swamp without first changing the incentives is wishful thinking.
            As for your proposed solutions, I cannot agree. Public financing is simply an incumbent’s protection act, and puts the government in the very uncomfortable position of deciding who gets to run for office. As for banning special interest contributions…just what is a special interest vs a good virtuous general interest? Who gets to define that, and just how do you square that with the First Ammendment, much less basic principles of the right of citizens to petition the government? The cure is worse, MUCH worse, than the disease.
            Some level of corruption is inevitable, but the less to be gained by indulging in it, the less corruption you will see. Not zero, but less, and less pervasive. We should structure our government for human beings, not saints who don’t need it in the first place.

          • FriendlyGoat

            Well we do. And “here’s something you’ll really like” (as Rocky used to say to the audience after Bullwinkle crashed into something.)

            Pre-Fracking is the reason why some people once thought RFS “might” make sense, but Post-Fracking is why there is absolutely no justification left.

          • f1b0nacc1

            Remember though, RFS was also designed to be an environmental boost, which it never was, and it is defended that way now.
            And I LOVE the Rocky quote….I have been a fan ever since my childhood, when it was new!

          • FriendlyGoat

            Me too. I was never much of a cartoon kid (exceptions being the permanent foiling of Wile E. Coyote), but Rocky and Bullwinkle were ahead of their times. It must have been a hoot in the writer’s room to do The Fractured Fairy Tales and Mr. Peabody’s Improbable History.
            I married a woman who might have been like Nell, possibly preferring the horse named “Horse” to me, the ever-bumbling Dudley. (Nah, not really. We’ve been married over 40 years, but she never met a horse or a mule she wouldn’t kiss.)

  • Andrew Allison

    Now seems as good a time as any to demand that Congress terminate this destructive boondoggle with extreme prejudice.

  • Frank Natoli

    If we want to blend more ethanol
    The planet “blended” petroleum millions of years ago in infinitely greater volumes than anything possible via corn crops.
    Ethanol is a two carbon molecule, with relatively poor energy content, thus LOUSY mileage.
    Gasoline is an eight carbon molecule, with much higher energy content, thus HIGHER mileage.
    Why would we want to be stupid?

    • f1b0nacc1

      The are Greens, it is all they know how to be…

    • Corlyss

      Because Iowa, the first state in the presidential circus, is a huge corn producer. Since every governor and congressman thinks of themselves as a potential presidential candidate, the higher up they get in the food chain, the less interested they are in terminating this obvious nonsense. Several years ago, the UN official whose writ is famine (and a fine job he’s done of it too) wept on camera calling ethanol a crime against humanity. Even that wasn’t enough to pry the program out of favor with future candidates.

      • f1b0nacc1

        Be fair, Cruz actually denounced the RFS a few days before the Iowa Caucuses, and still carried the state.
        A rare display of political courage, a pity it wasn’t more generally rewarded

        • Corlyss

          Maybe there’s hope?

          • f1b0nacc1

            I think that we will see far less knee-bending in the next election cycle….but that is far away right now, lets survive this one first!

  • Arkeygeezer

    Maybe the Trump will have the gonads to resolve this boondoggle! Nobody else will.
    I agree that ethanol is almost a bigger hoax than global warming. Its about time we got rid of them both.

  • Corlyss

    If EPA’s dominance continues, it will double down on the requirement to increase the ethanol content and consider it a stimulus proposal that will compel owners of older cars to purchase new cars.

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