The Cruz Blend Wall

  • Friday, 08 January 2016 13:24

After facing a barrage of attacks from the ethanol industry, Republican presidential candidate, Sen. Ted Cruz, has offered up a bizzarre defense of his anti-RFS stance. 

Cruz bw

While acknowledging his opposition to the RFS and his plans to phase out the law, Cruz maintains that he actually supports ethanol and the industry. Now, like everyone else, you're wondering how does one support the ethanol industry and yet oppose the RFS?

Well, for starters, Cruz, claims that the EPA has created a blend wall that has limited ethanol blends to E10. By getting rid of the RFS and the EPA's oversight, the industry will grow on its own and blends like E25 or E30 will be widely available.

That's right. Take a minute to digest that. We certainly did. 

Let's start with the most ridiculous assertion : The EPA created the blend wall.

While we and many other groups have accurately accused the EPA of being obsessed with the E10 blend wall, the agency is in no way responsible for its creation. 

No, Sen. Cruz. The so-called blend wall was created by the oil industry to prevent the ethanol industry from expanding its share of transportation fuel. After all, it was the EPA who approved the use of E15 in all light-duty vehicles 2001 and newer.

The reason why the EPA continues to be fixated on the blend wall is because access to E15 has been limited. It constantly argues that it has to lower the RVO because there aren't enough stations that offer E15 or consumers that use it.

While that argument goes against the very nature of the RFS, it means the EPA is essentially hoping market forces, without any regulatory push, will increase E15 consumption. And while demand for E15 has picked up - 2.54 million gallons were sold in Minnesota as of Nov 30 last year - access is still limited. 

No, Sen. Cruz. It's not the EPA that has prevented access to fuels with higher blends of ethanol. It's your friends at Big Oil. Consider the fact that not one Big Oil-branded station offers E15. Why is that, Sen. Cruz? 

The EPA's problem is that it has continued to capitulate to Big Oil by setting the RVOs at Big Oil's preferred level - the E10 blend wall.

And considering how difficult it has been to increase access to E15, does Cruz really think it will be easier with E25 or E30? 

"If allowed full market access, mid-level ethanol products like E25 or E30 could prove quite popular with American consumers, who are increasingly concerned with fuel economy," he said.

Well, there are no regulations preventing the sale of E15 (ie: full market access) and yet access to it is still limited. Why is that? Perhaps Sen. Cruz should spend a day at our office to see how "easy" it is convincing retailers to offer fuels like E15 or educating consumers on the benefits of using E15.

Let's not forget that E15 can be used by 90 percent of the cars on the road. E25 or E30 can only be used by flex fuel vehicles. Good luck convincing retailers to offer a fuel that only a third of the market can use.

And what about warranties? Only after the EPA's approval of E15 have car manufacturers begun approving its use in their non-flex fuel vehicles. Without the EPA's approval and testing (which were spurred by the RFS), are carmakers just going to approve E30 for their non-flex fuel vehicles? Does Sen. Cruz know how any of this works?

Maybe he does. 

Maybe he is aware that by dismantling the RFS, the Big Oil-branded stations no longer have to comply with the law and offer E10. 

Maybe he is aware that in the absence of any guidance from the EPA, carmakers won't automatically approve E25 or E30 for their non-flex fuels under a Cruz administration and access to those fuels will remain the niche products they are now. Let's face it, there isn't going to be widespread availability of those fuels if only a small percentage of the market can use them. 

And maybe he is completely aware that his plans for the ethanol industry will inevitably reduce the industry's share of the transportation fuel market. 

Now, isn't that what Big Oil wants?