One more thing to add to the list; the government shut down will most definitely delay the EPA’s latest ruling on the Renewable Fuel Standard.
The final RFS rule is due on November 30, and though the EPA historically misses that deadline, this year a late ruling could be met with more consternation as the EPA is expected to address the blend wall.
The blend wall is the point when every single gallon of gasoline sold includes ten percent ethanol, making it difficult for petroleum retailers to meet the guidelines in the RFS.
As the industry nears the blend wall, it will become impossible for retailers to increase the amount of ethanol they sell without more flex fuel vehicles on the road or an immediate increase in blended ethanol sales across the nation. Both of these options have been unpopular with the EPA and petroleum interests as they dig into oil’s bottom line.
The American Petroleum Institute and the American Fuel & Petrochemical Manufacturers have also petitioned the EPA to use its authority under the Clean Air Act to set the overall renewable fuel blending requirement for 2014 at 14.8 billion gallons to avoid reaching the blend wall.
The EPA has 90 days to respond to that petition, but the shutdown could delay that response as well.
IL Corn believes the obvious, though unrealistic option given our current administration, is to encourage the production of flex fuel vehicles instead of electric hybrids – for which there is no infrastructure – and immediately provide incentives for retailers to install flex fuel pumps. This gives consumers the choice to choose higher blends of ethanol or the E10 that they are used to and quickly relieves the burden of the blend wall for retailers.
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