What’s Really Happening with the So-called ‘Blend Wall’? A Fuels America Briefing

by Sarah Dik (Biotechnology Industry Organization) The public dialog surrounding the Renewable Fuel Standard is robust- and filled with misinformation. On July 11, Rep. Lee Terry and Rep. Bruce Braley held the third of a series of briefings, which focused on what is really happening with the so-called ‘Blend Wall.’ The briefing consisted of five speakers, including BIO’s own Brent Erickson, Executive Vice President of the Industrial and Environmental Section.
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First to discuss his experience with the so-called blend wall was Dr. Andy Randolph, of Richard Childress Racing (RCR). He began by providing a bit of background on the ECR engines, which are used for the Chevrolet NASCAR sprint cup.
In 2008, the race cars of NASCAR were using a high octane fuel that has aromatic levels greater than 40 percent, i.e. they were highly carcinogenic. Starting in 2011, the cars using ECR engines made the switch to E-15 fuel in order to lower their aromatic concentrations to less than 20 percent. In the years following this switch, Dr. Randolph has observed slight increases in engine power and reduced deposit buildup. They experienced a seamless transition to E-15 fuels in the ECR engines and have since accrued over 3 million miles in race condition with no incidents. So, where is this so-called blend-wall?
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The final presentation of the briefing was given by Bob Casper, President and Chief Commercial Officer of POET Ethanol Products. Mr. Casper began his presentation by discussing the current fuel distribution system for ethanol. In addition to vast production capacity in the bio-refining industry, there is also a bulk transport system built for E-10 which can be used for higher blends (up to E88) without needing any changes. In order to accommodate E-15 fuels, any pump can be retrofitted for just $800.
So, according to Mr. Casper, the blend wall is not a constraint. Rather, the competitive threat of ethanol in a free and open market is causing incumbents to use regulations as barriers. The reality is that ethanol has a $1.70 per gallon advantage over oil. Additionally, MathPro Inc. examined the consumer savings of the RFS and found that $31 billion a year was being saved as a result of E-10. The use of E-15 in the market would cause refineries to lose another 5 percent of their profit to ethanol producers, although it would further consumer savings. The notion of a blend wall has stemmed from this economic threat, not an actual incapacity of E-15 use in vehicles, as all of these speakers demonstrated on various levels. READ MORE