DOE warns of ethanol blend wall

Des Moines Register
Blog post by Philip Brasher • pbrasher@dmreg.com • July 13, 2010

Unless more ethanol is allowed to be added to conventional gasoline, prices for the corn product are likely to fall because of the saturated market, the Energy Department says.

The department says that ethanol was blended into 9.2 percent of the total gasoline supply during April and that number could reach 10 percent in the first quarter of next year.

Under the EPA’s current regulations, gasoline used in conventional cars and trucks cannot contain more than 10 percent ethanol. That means that unless the EPA raises the limit, and service stations sell higher blends than 10 percent, the extra ethanol has to be sold for somewhere else. It could be sold for flexible-fuel cars as E85, 85 percent ethanol and 15 percent gasoline, or shipped overseas. E85 will have to be priced significantly lower than conventional gasoline because of its poorer mileage, the department said.

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