Building Ethanol Infrastructure
While the Illinois Corn Growers Association works in Springfield and Washington, DC, to enhance opportunities for corn-based ethanol in our nation’s fuel supply, the Illinois Corn Marketing Board is investing in fueling infrastructure. We know that greater than 95% of all gasoline sold today is an E10 blend. We also know that the 98% of all the ethanol we use in the U.S. is sold through E10. That means that we’re just about tapped out. And based on fuel demand and limited fueling infrastructure, we’re hitting our heads against the blend wall.
So why think about growing ethanol demand when we have the Renewable Fuel Standard? Because the RFS isn’t enough to chew up your ever increasing corn crop yields. Let’s take a look at this example.
Today, our gasoline consumption is about 135 billion gallons per year in round figures. There are about 250 million licensed drivers in the U.S., and on average, each of those drivers uses 540 gallons of gasoline each year. That number is probably low for those of us in farm country, but that is the national average.
What if we could get just 25% of those drivers to use a higher ethanol blend like E15?
25% of 250 million drivers is 62.5 million. If they each used 540 gallons of gas a year, the E15 market would then be 34 billion gallons.
Okay, so what does that mean for corn? Going from E10 to E15 in this example means we’d be talking about those 34 billion gallons, times 5% more ethanol. That equals an increased demand of 1.7 billion gallons of ethanol and 3.5 million acres of corn demand to go with it.
That’s how we get around the blend wall, in this example, with E15.
Remember, the RFS sets us up for a limit. It’s not the final answer unless you’re okay with depressed corn prices.
E15 is just part of the answer here, an interim step. Another step is the work your Illinois Corn Marketing Board is doing with automobile manufacturers as they’re designing high compression engines to meet the government’s CAFE and emissions standards. With that engine design, they need higher octane fuel. Ethanol is the cheapest, most readily available source of octane in the world. It won’t be too long before these newer vehicles will require a higher octane gasoline. And you’ll be growing the corn that provides the octane to clear the air and provide improved mileage standards.