Will The 'Blend Wall' Finally Crack In 2016?

  • Wednesday, 10 June 2015 00:00

The “blend wall,” a fictional concept devised by the oil industry to keep ethanol’s share of the market at 10 percent, has long been a fixation with the folks at the EPA.

The agency’s recent announcement for the RVO target for 2015 of 13.4 billion gallons is clearly based on the “blend wall” theory. But its target for 2016 (14 billion gallons) suggested that it was ready to partially abandon its blend wall fixation.

And a new report by the Energy Information Administration (EIA) furthers that belief. Released June 9, the EIA’s new Short-Term Energy Outlook (STEO) sees ethanol consumption next year at 13.73 billion gallons (896,000 barrels per day).

Moreover, at that rate, the EIA says ethanol’s share of the total gasoline pool will be at 9.9 percent. As such, achieving the EPA’s target of 14 billion gallons will certainly see ethanol’s share of the gasoline market surpass the 10 percent mark and thus crack the fictitious blend wall.

In addition, the EIA forecasts ethanol consumption this year to be 13.65 billion gallons, higher than the EPA’s target of 13.4 billion gallons.

Despite the EIA’s difference in its forecasts to the EPA’s targets, the former said it used the EPA’s RFS targets “in developing the current STEO.”

Make no mistake, the oil industry will use the STEO to validate its claims that the EPA’s 14 billion gallon target for next year is not achievable.

But if the EPA is truly committed to achieving Congress’ goal of increasing renewable fuel consumption then it needs to stop its obsession with the “blend wall.”

Surely it is aware that Congress' goals can be achieved if E15 became the new regular. In fact, if E15 becomes the new regular, ethanol consumption would be 19 billion gallons a year, far more than the RVOs stipulated in the RFS for 2015 and 2016 (15 billion gallons). Furthermore, the National Renewable Energy Laboratory confirms that virtually all the fuel stations have the storage and dispensing systems capable of making E15 available to consumers.

Now, isn't this the same agency that approved E15 for light-duty vehicles 2001 and newer?