It’s vacation time in the USA and one thing that I’d like to get away from is the overheated, apocalyptic rhetoric coming from the renewable fuels industry and its defenders. The Huffington Post recently said that EPA’s recognition of the ethanol blend wall has put the renewable fuels industry in peril and that “the very future of the renewable fuel industry hangs in the balance.”
EPA proposes to increase the renewable fuels mandate for 2015 by 2.3 percent compared to the 2014 mandate and then increase the mandate for 2016 by another 6.8 percent over the 2015 mandate. So what’s in peril here? Common sense? The federal government is actually proposing to guarantee an increase in market share for renewable fuels over the next two years. And let’s not forget that the federal government’s renewable fuel mandates have tripled the amount of ethanol in gasoline since 2005. The renewable fuels industry isn’t dying; it doesn’t even have a headache.
HuffPo also called the blend wall a myth and claimed it has been fabricated by the oil industry. What they ignore is that the blend wall exists because automakers will not warranty their vehicles if the ethanol content of fuel exceeds 10 percent. It is irrelevant that Henry Ford designed automobiles to run on ethanol. What matters is that many of the vehicles in use today were not.
Here’s another point that they ignore. The blend wall can be busted by the renewable fuels industry. All they have to do is produce a “drop-in” renewable fuel that isn’t limited by engine design. Producing an affordable drop-in renewable fuel is a difficult technical challenge, but EPA thinks there is another way to bust the blend wall: E85. However, this assumption runs into difficulties the moment it faces the hard realities of infrastructure and demand.
Given that approximately six percent of the existing light duty vehicle fleet in the U.S. is capable of operating on E85 or gasoline (known as flex-fuel vehicles), the E85 blend could become a big-seller if flex-fuel vehicle owners could be persuaded to ditch the gasoline and switch to E85 instead. Alas, due to infrastructure and demand constraints – there’s very little of either – E85 demand remains only about 0.15 percent of the gasoline pool. It seems the renewable fuels industry is having a hard time convincing consumers that ethanol is a better, more affordable product…
The renewable fuels industry is built on the Renewable Fuel Standard so it’s understandable that they want to defend the RFS vigorously. Fine. Just don’t make it sound like it’s the last scene in Hamlet (spoiler alert – everybody dies).