USDA Experts Say Ethanol Blend Wall is Close
Ethanol is getting very close to hitting the blend wall, according to economists with the U.S. Department of Agriculture.
With four months in a row of record ethanol production and stagnant gasoline demand, ethanol stocks are increasing. “Margins have weakened a lot over the last few weeks,” says USDA chief economist Joe Glauber, and indicators are that the blend wall is closing in.
“We’ve seen a sharp drop in ethanol prices,” USDA Outlook Board Gerry Bange adds in a USDA radio report, which he says has cut returns for ethanol producers dramatically.
That means that the future for the industry may very well hinge on the decision EPA has yet to make – moving the allowable blend level for ethanol in gasoline up to 15 percent from the current 10. “Given the fact that gasoline consumption in this country simply is not growing very rapidly and has essentially been flat for some time now, we are getting to the point where we simply have absorbed as much ethanol as we can under the current E10 legislation,” said Bange.
USDA’s latest supply-demand report out Friday left projected 2009-10 corn use for ethanol unchanged at 4.3 million bushels but lowered corn feed and residual use by 100 million bushels lower as March 1 stocks and a record January ethanol production indicate lower-than-expected December-February feed and residual disappearance.
7 Comments »
Kum Dollison
The ethanol producers need to get off their duff, and start renting island space to install E85 pumps, now. The price is right, it’s a workable concept as has been proven by Pearsons, Propel, and others, and there are enough flexfuel vehicles coming out of GM, Ford, and Chrysler to make it work very well.
The “Gubmint” can only help you so far, boys. Time to start “helping yourselves.”
Francis Patrick
E-85 is a far superior fuel to gasoline. Gasoline has been an obsolete fuel since the clean air act of the 1960′s. Instead of punishing the auto makers for vehicles that don’t meet mpg standards they should just require the vehicles to use E-85.
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Ben G
I’m doing what I can to use up some of that E85. I converted my 2003 Dodge Neon to use E85 about two years ago and have been driving with it for about 42,000 miles ever since. The car runs fantastic and better than ever despite all the naysayers telling me that my car would fall apart after one tank full. And my calculated mileage loss is only about 5% (10% in colder weather).
Several companies make fuel injector conversion kits for E85. I got mine from http://www.whitelightning.net.
Please note my car has a plastic fuel tank. I don’t know if it’s true or not, but I’ve heard that it’s not a wise decision to convert if you have a metal tank as the ethanol can supposedly eat away at the inside finish? Just beware you may have to also replace your fuel filter after 500 miles or so as the ethanol will clean out all the crud left behind by gasoline in your fuel tank (gasoline is a nasty, nasty fuel to begin with and leaves a thick residue). On some cars it’s not a tough job if it’s located outside the tank, but on my car the filter is built into the fuel pump and I ended up having to temporarily remove the entire fuel tank to replace it.
Make sure to get a Haynes or Chilton manual for your car model if you’re gonna DIY.
Steve D
Adding additional pumps for E85 may work but, you can’t convert the fuel supply from 10% to 15% at this time. There are far too many cars on the road which will not handle the conversion. Shade tree mechanics may want to tackle the conversion but, what about the retired people that can’t buy another car nor afford to pay for a conversion by the dealer?
E30 NOW
I run E30 in my ACURA TL and it loves it. I get 32+ mpg highway. I have ran ethanol in my 97 Nissan Maxia, 2001 Toyota Sequoia, Acura MDX (which likes E20 or else my check engine light comes on). So I have blended E85 with E10 for years and hundreds of thousands of miles without any problems. My exaust even smells cleaner. NO joke you can smell the difference when you walk behind it (when I cannot find E85 to blend). I have to say that it is almost impossible to find E85 pumps. There should be a law that all new gas stations should have 10% of their pumps E85. That is not asking for too much. Plus car companies need to start building higher compression engines so that (like they did back in the 60s and 70s) to take advantage of ethanol’s high octane. Ethanol loves high octane but Detroit builds flex fuel low compression engines so that the salesmen can say “And you can fill it up with regular gas”.
When will America Wake Up. Brazil got off of foreign oil and WE CAN TOO.
E30 NOW
The average fill up is 10 gallons of fuel.
Put 1 gallon of E85 and 9 gallons of E10
85 + (9×10) 90 = 175 / 10 (total gallons of fuel) = 17.5 % Ethanol.
105 (octane of ethanol) + (9 gallons of gas x 87 octane rating) = 888 / 10 = 88.8 octane rating.
Ethanol is 1.89 a gallon where I live.
Blend (2×85)= 170 + (8×10) 80 = 250 / 10 = 25% ethanol.
105×2 = 210 + (8×87) 696 = 906 / 10 = 90.6 octane (super at some gas stations)
(1.89 x 2) = 3.78 + (8x 2.70) 21.20 = 24.98 for 10 gallons of 90.6 octane or 2.49 per gallon of 90.6 octane.
I run 89 octane plus 30% Ethanol so I get 94 Octane for around 2.49 per gallon. If the rest of the country did this we would import like a billion less barrells of oil.
There are only 18 gallons of gas in one 42 gallon drum of oil anyway. so for every 18 gallons of ethanol we use we can import one less gallon of foreign oil.
and T boone is right, big diesels need to be using natural gas instead of the #2 high sulfer diesel fuel that should be outlawed with #1 diesel.
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