Vilsack: Low Demand, Blend Wall Limit U.S. Ethanol Expansion

U.S. Agriculture Secretary said that the U.S. should move to expand the distribution network of ethanol and promote its use in aviation and marine fuel.

November 12, 2013

WASHINGTON — U.S. Agriculture Secretary Tom Vilsack said that no matter how high the government ethanol mandate, lower gasoline demand and a “blend wall” are slowing the country’s ethanol expansion, Reuters reports.

"We are bumping up against this thing called the 'blend wall,' where essentially there's no other place to put the ethanol unless we have increased blend rates," Vilsack said.

The Environmental Protection Agency is expected to propose reducing the Renewable Fuel Standard (RFS) from its existing target of 18.15 billion gallons of biofuels for 2014, as mandated by federal law.

Oil refiners have lobbied vigorously for reducing the mandate, arguing they cannot add more than 10% ethanol blend into gasoline without risking damaging engines. EPA has said biofuels with as much as 15% ethanol are safe for vehicles model year 2001 or later.

Meanwhile, better fuel efficiency in modern vehicles has lowered gasoline demand.

"I think EPA's got a difficult task because they are faced with the fact that those standards were set on the premise that we as a country would consume more and more gasoline from year to year," Vilsack said. "The reality is, with fuel efficient vehicles, we are consuming less (gasoline). So the assumption upon which those numbers was based was incorrect."

Vilsack said efforts by some lawmakers to repeal the Renewable Fuel Standard "concerns me,” adding that the U.S. should move to expand the distribution network of ethanol and promote its use in aviation and marine fuel.

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