USDA Report Highlights Hurdles to Higher Ethanol Blends
(Farm Journal Ag/Web/Pro Farmer Editors) Biofuel and farm groups see E15 and other higher blends of corn ethanol into gasoline as the strategy to increased sales, but the current structure of the Renewable Fuel Standard “does not serve to incentivize ethanol blends higher than E10,” according to a report from USDA’s Office of the Chief Economist. The report “evaluates market conditions and provides an analysis of barriers for higher ethanol blends, including technical, regulatory, consumer acceptance, and economic challenges.”
The report concludes, “Looking forward, there are concerns about possible ethanol demand reductions given the projected reduction in gasoline demand in the coming decade. Given the decline in FFVs (flex fuel vehicles) and lack of growth in E85 sales, mid-level ethanol blends, in particular E15, are options to expand future ethanol markets. Furthermore, transitioning to ethanol blends between E11 to E25 will be easier and less costly than blends above E25. The current structure of the RFS, combined with the commercialization stage of cellulosic fuels, does not serve to incentivize ethanol blends higher than E10. Federal and State policies are providing incentives for the conversion of refueling infrastructure. Finally, resolution and clarity relative to the permissibility of E15 to be sold year[1]round will have implications for the marketability and expansion of E15. Gas stations are less likely to invest in infrastructure for a fuel that can only be sold for a portion of the year.”
Click here to view the full report. READ MORE
Assessing Future Market Opportunities and Challenges for E15 and Higher Ethanol Blends (U.S. Department of Agriculture)
2. ETHANOL SALES GROWTH FACING UNCERTAINTY, USDA SAYS (Successful Farming)
ETHANOL MARKET FACING STRONG HEADWINDS (Brownfield Ag News; includes VIDEO)
Excerpt from U.S. Department of Agriculture: Table of Contents
Abstract …………………………………………………………………………………………………………………….iii
Table of Contents…………………………………………………………………………………………………………iv
List of Figures………………………………………………………………………………………………………………v
List of Tables……………………………………………………………………………………………………………….v
I. Introduction…………………………………………………………………………………………………………….2
II. Background …………………………………………………………………………………………………………….2
III. Current Market for E15 and Higher Ethanol Blends ……………………………………………………6
1. Ethanol Blends ………………………………………………………………………………………………………6
2. Existing Infrastructure ……………………………………………………………………………………………10
IV. Current Costs of Installing E15 and Higher Ethanol Blend Equipment ………………………….14
1. Service Station Components…………………………………………………………………………………….14
2. Tanks ………………………………………………………………………………………………………………..15
3. Dispensers and Blender Pumps…………………………………………………………………………………16
4. Cost Summary……………………………………………………………………………………………………..16
V. The Role of Government Policies………………………………………………………………………………..18
1. State Mandates …………………………………………………………………………………………………….18
2. State Financial Support…………………………………………………………………………………………..19
3. RFS…………………………………………………………………………………………………………………..19
4. Ethanol Waivers …………………………………………………………………………………………………..20
5. Control of Air Pollution From Motor Vehicles ……………………………………………………………..21
6. Federal Financial Support ……………………………………………………………………………………….21
VII. Challenges and Opportunities ………………………………………………………………………………24
1. Consumer Acceptance ……………………………………………………………………………………………24
2. Legal and Contractual Considerations…………………………………………………………………………25
3. Economic Considerations………………………………………………………………………………………..25
VI. Conclusion …………………………………………………………………………………………………………26
VII. References………………………………………………………………………………………………………..27
VIII. Appendixes……………………………………………………………………………………………………35
Appendix A. Related Ethanol Laws and Incentives…………………………………………………………….35
Appendix B. Ethanol Capacity and Number of Facilities by State…………………………………………..39
Appendix C. Typical Fuel Dispenser, Underground Storage Piping ………………………………………..40
Appendix D. Equipment Compatibility with Ethanol Blends…………………………………………………41