The EPA has published the ethanol blending quotas for 2014, 2015 and 2016 as required by their consent decree. Apparently, their statistics are made up by the same elves that work in U.S. Department of Labor. They make about as much sense as our unemployment and inflation numbers. If you believe that the unemployment rate is about 5% and the CPI is less than 2%, stop reading this blog because the statistics herein will give you brain hemorrhoids.
Lets take a look at the just published EPA renewable fuels mandate for 2014: 16.8 billion gallons. Now remove the bio-diesel component, 2.67 billion gallons and you are left with about 14.65 billion gallons of “ethanol”, plus or minus a fraction since it is almost impossible to account for cellulosic and “advanced” biofuel which can be almost anything, including swamp gas.
Now look at the EIA production statistics. The US produces about 153 billion gallons of Finished Motor Gasoline / year. Production in 2014 was less than that, but it appears to be increasing slowly. You have probably heard that the U.S. is exporting finished gasoline lately. This is pretty obvious if you look at the annual sales of Motor Gasoline for 2014: about 126 billion gallons, which is down a little from 2013. The data seems to confirm the U.S. is exporting a lot of finished gasoline.
So, here’s the problem: 14+ billion gallons of ethanol was enough to make every single drop of gasoline consumed in the U.S. in 2014, E10, with a couple of billion gallons of ethanol left over. But that did not happen. I know that because I can still buy some E0 for my airplane here in Oregon and the number of stations pumping E0 rises every month on pure-gas.org. Since gasoline consumption is essentially flat, or declining, and it has been for years, there is nowhere to blend the almost 500 addition millions of gallons of ethanol outlined in the 2015 quota. Obviously another billion+ gallons of ethanol in 2016 is not going to be blended. Wonder where it will be stored. (Maybe there will be an ethanol cotango just like there is an oil cotango. I’ll leave it to the reader to figure that one out. Maybe you could make a buck.)
Luckily there is a loophole in the RFS that allows producers to push 20% of their quota into the next year. Otherwise, this whole fiasco would have imploded years ago. But it still will. As my favorite Vulcan would say, “This is not logical.” RIP Leonard Nimoy.
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