May 07, 2010
Approaching the Blend Wall - What it means for our economic future
Biofuels economist Bob Wisner’s most recent newsletter indicates that when the ethanol industry reaches maximum integration into the US fuel supply, also known as the blend wall, it will "halt growth of the ethanol industry" and severly limit the development and commercialization of the cellulosuic ethanol industry.
Wisner says that two of the reasons the market is facing saturation are:
•EPA’s maximum allowable blend of E-10 for most gasoline-powered vehicles, and
•Infrastructure impediments that limit the ability to move ethanol to consumers in some areas
Growth Energy is working on several fronts – both in legislative affairs and with the regulatory agencies – to help address these issues:
First, In March 2009, Growth Energy filed its Green Jobs Waiver to the U.S. Environmental Protection Agency seeking approval to blend up to 15 percent ethanol in gasoline, from the current cap of 10 percent ethanol. By raising the “blend wall” from E10 to E15, the Growth Energy Green Jobs Waiver would accelerate the use of renewable fuel, increase energy security, create as many as 136,000 U.S. jobs, reduce transportation costs to everyday Americans, and improve the environment by displacing conventional gasoline with low-carbon ethanol.
Moving from E10 to E15 would also eliminate as much as 20 million metric tons of GHG emissions from the air in a year — the equivalent of taking 10.5 million vehicles off the road and displace some of the 12 million barrels of oil that is imported every day into the United States from countries such as Venezuela, Saudi Arabia and Abu Dhabi.
Second, the number of fueling stations that supply mid- and high-level blends between E15 and E85 is very small. In fact, out of more than 170,000 fueling stations nationwide, there are only about 2,200 that offer ethanol blends higher than E10. Two-thirds of those stations are concentrated in just 10 states. If we’re going to put Americans back to work, strengthen our national security and reduce greenhouse gas emissions, more American motorists will need the choice of fueling their automobile with domestically-produced, renewable, and low-carbon ethanol. Growth Energy is working to promote the construction of fuel-dispensing equipment and other infrastructure to help deliver deliver ethanol to wholesale markets – and ultimately consumers at the fueling station.
The ethanol industry has tremendous opportunity to reduce our dependence on foreign oil, create jobs and clean our skies, but the 10 percent regulatory cap will slow development of second generation fuels, which most high-level decision makers believe is the key to our economic prosperity. As President Obama said on his recent "White House to Main Street tour", there shouldn’t be any doubt that renewable, homegrown fuels are a key part of our strategy for a clean energy future."
As we inch closer to the blend wall, without government policy changes to remove it, the future of second generation ethanol is at risk - and so is our economic future.
