Coping with the "blend wall"

Part of the problem with biofuels gaining any momentum in our current car-driven, fossil fuel based economy is that our engines are built to run on gasoline..which can be blended with 10% ethanol. If the U.S. uses ~140 billion gallons of gasoline a year, then the demand for ethanol is about 14 billion gallons annually. Apparently we already produce about 12 billion gallons of corn ethanol per year (with even more capacity in idled biorefineries)...so we have basically reached what is referred to as the "blend wall," with no market for cellulosic ethanol.

How to cope with this dilemma?

One option would be to replace all corn-based ethanol plants with cellulosic biofuel pruduction plants, which would be an expensive, short-term fix, essentially tearing down something fully functional. And the "blend wall" problem would remain, with a maximum market of 14 billion gallons.

Another option is to increase the required amount of ethanol in blended fuels to 12% or 15%, something the EPA is considering. This is the most likely scenario, as it's technically and politically safest. But truthfully, this option will not do a whole lot to encourage use of biofuels in the long-term. I think of this option as a baby step, not covering much ground, but better than nothing.

A third, bolder option would be to make the leap to flex-fuel car engines, such as those that run on E85 ethanol (a fuel blend of 85% ethanol & 15% gasoline). Most of the cars in Brazil are built to run using some level of blended fuel, up to 100% ethanol. Since Brazil generates all of their own ethanol from sugarcane refineries, they have attractively achieved energy security (a topic for a future blog). Estimates of the cost of producing all future car engines to be flex-fuel lays around $100/car. If the average cost per new car in 2009 sold in the U.S. (according to the National Automobile Dealers Association) is $28,400, this minor change would amount to less than 1% of the value of the car. Although flex fuel contains its own controversies, it seems like a bold alternative way forward that would encourage both greater energy security and economic stability for the cellulosic biofuels market.