Drought Mutes E15 Impact | Long-Awaited Ethanol Market Expansion Hope Dries

Where we stood before the drought

Ethanol produced to date in the U.S. has been primarily E10 (10% ethanol blended with gasoline) and blends up to E85 (85% ethanol used in flex-fuel vehicles). Bob Dinneen, Renewable Fuels Association (RFA) president and CEO, says 14 billion gallons of ethanol – representing the E10 blend wall – are used domestically in about a 130-billion-gal. annual gasoline market. One bushel of corn yields 2.8 gal. of ethanol.

The 2007 U.S. energy bill mandated that 15 billion gallons of ethanol be produced by 2015 to help improve energy independence. RFS2 increased the required volume of renewable fuel to be blended into transportation fuel to 36 billion gallons by 2022. A nationwide E15 market could represent nearly 20 billion gallons of annual ethanol demand from 7 billion bushels of corn.
E15 is approved for use in model-year 2001 and newer vehicles; about 62% of the light-duty vehicles on the road today, representing more than 80% of the unleaded fuel sold.

"In the longer run, mandates, rather than the market, will drive ethanol use for the most part," says Wyatt Thompson, FAPRI assistant professor. "E15 expansion pushes back the blend wall a little, but additional large increases in ethanol use must come from higher blends, such as E85."