My recent series on a plan for securing the Midwest's ethanol markets was generally well-received. There were two consistent objections, which I address here.
I warnedit probably would be shortly after he was sworn in. Today's ethanol industry is essentially a product of the Renewable Fuel Standard which was created in 2005. The ethanol industry has been dependent since then on continued federal support of the RFS for its markets.
My proposed solution is for the Midwestern states to band together to provide sufficient state incentives to develop a major Midwest corridor where E85 -- a blend of 85% ethanol and 15% gasoline -- is the primary fuel of choice for consumers. There is enough potential demand in the Midwest to consume nearly five times current U.S. ethanol production.
Thus, the E85 infrastructure is there, and there are plenty of E85 vehicles on the roads to begin growing E85 demand. There are multiple problems with this argument. The first is that if refiners really need ethanol for octane, then they will use it. Refiners are in the business of making money, and if the RFS was not in place they would evaluate ethanol as an octane-boosting option in the same way they would evaluate other options.
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