The “blend wall” is a creation of the oil companies’ failure to respond appropriately to the very clear market signal given upon passage of the Energy Independence and Security Act of 2007. Its sole existence relies on the fact that the oil industry has “steadfastly refused” to invest in blender pumps, storage tanks, and other infrastructure compatible with E15-and-higher ethanol blends.
In 2016, the ethanol industry broke the so-called “blend wall” as production and usage set new records. U.S. ethanol production set a record of 15.33 billion gallons (bg) in 2016, according to the Energy Information Administration (EIA). The EIA data also show that the average gallon of gasoline likely contained slightly more than 10.0% ethanol in 2016.
- The RFA does not believe legislative changes to the Renewable Fuel Standard (RFS) program are necessary to address the “blend wall.” The flexibility and market driving mechanisms included in the RFS will ultimately provide appropriate responses.
- The “blend wall” is a creation of the oil companies’ failure to respond appropriately to the very clear market signal given upon passage of the Energy Independence and Security Act of 2007.
- The intent of the RFS was always to push beyond the blend wall and increase the share of renewable fuels in our nation’s fuel supply.
- Oil companies and their downstream partners knew seven years ago when the RFS2 was adopted that the policy would eventually drive demand for ethanol blends above E10. Yet, these companies failed to make any meaningful investments in the terminal and retail infrastructure needed to distribute higher level blends like E85 and E15.
- The renewable fuels industry responded by increasing production and making investments in new technologies.
- The RFS will drive the innovation needed to scale the blend wall as long as Congress leaves the policy in place, and allows the RIN mechanism to drive investment in infrastructure and compel consumer choice at the pump.