Ethanol and the Blend Wall
For the past three years ethanol production has exceeded the “blend wall,” the 10 percent figure where auto companies and oil refiners say the ethanol content say will damage engines because of its corrosive effects. Some of this excess production has been absorbed by exports – which have increased 33 percent since 2014. But most indications are that the U.S. gas supply will not be able to absorb ethanol production because of declining gasoline consumption – indicated by the red line. Of course the ethanol industry says that the blend wall is just a myth designed by the oil companies. They say that cars manufactured since 2000 have been designed to burn more than 10 percent ethanol and that E-85, a blend of 85 percent ethanol, is being sold in the Midwest. So far their arguments have not had much effect and the “blend wall” remains an impediment to more ethanol consumption.