NEW ORLEANS, La. — U.S. corn growers believe higher ethanol blends are the way to reverse slumping grain prices.
Corn prices have fallen 34 percent since 2010 as demand from the ethanol industry stalled because of the E10 blend wall.
An estimated 99 percent of gasoline sold in the United States contains 10 percent ethanol.
The only way to expand ethanol consumption is by moving to higher blends, such as E15.
“Ethanol is the most important driver for future growth of corn demand,” Chip Bowling, president of the National Corn Growers Association, told reporters during Commodity Classic 2016.
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“We’re pushing for changes that would give every American year-round access to E15.”
E15 has been approved for use in vehicles made in 2001 or later, but little of the fuel is sold because of regulations surrounding Reid vapor pressure (RVP), which measures the evaporation rate of gasoline.
Fuel is not allowed to have an RVP measure that exceeds nine pounds per sq. inch from May 1 to Sept. 15.
Adding 10 percent ethanol to conventional nine p.s.i. gasoline raises the RVP value to about 10 p.s.i.
Congress passed a one pound waiver in 1990 to accommodate E10 blends, but no such waiver is in place for E15 blends.
Kelly Manning, vice-president of development with Growth Energy, said it means fuel retailers can sell E15 blends at all pumps during the winter, but they have to switch to selling the blend only in their flex fuel vehicle pumps when summer comes.
“The volumes of E15 are significant when they can sell it as a base fuel, but when we have to go back and sell it as a flex fuel, they dive,” Manning said during a panel discussion on the future of ethanol.
Corn growers and ethanol manufacturers want Congress to approve legislation that would extend the waiver to E15 blends because the RVP value is essentially the same as E10 blends.
Manning said more than 50 members of Congress have supported the legislation.
Corn and ethanol groups have also created Prime the Pump, a program designed to provide financial support to fuel retailers for buying and installing the pump infrastructure required to distribute E15 blends.
Manning said six retailers, including some of the nation’s top 20 chains, have signed up for the program. E15 pumps now operate in 22 states.
“We would have never realized this kind of success could have happened a few years back,” he said.
“By the end of 2017, there will be 5,000 pumps in this country that will dispense E15.”
Syngenta donated $600,000 to the program. It has a vested interest in boosting ethanol demand because it developed Enogen, a corn trait that increases ethanol yield by three percent per bushel of corn.
Jack Bernens, head of Enogen, said ethanol has had a dramatic impact on corn demand and corn prices. The ethanol industry accounts for 39 percent of total annual demand for U.S. corn.
“If we can get to E15, that increases the amount of ethanol we need by about 50 percent,” he said.
Retailers that have signed up for the Prime the Pump program are reporting strong sales of the E15 blends.
Ethanol trades for about $1 per gallon less than gasoline, so consumers are paying 15 cents per gallon less for an E15 blend than they do for regular gasoline, and it provides them with a higher octane fuel.
Manning said the U.S. Department of Agriculture co-opted the Prime the Pump model when it created the $100 million Biofuels Infrastructure Partnership program.
The goal of the USDA’s program is to double the number of fuel pumps capable of supplying higher ethanol blends such as E15.
Manning estimates that E15 pumps will be in 1,000 of the country’s 160,000 convenience stores by the end of 2017. He believes there will be widespread adoption of the fuel blend within five years.
sean.pratt@producer.com
