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As I see folks are honking about Trump era ethanol waivers and ostensible *demand destruction* of some 4 billion gallons of ethanol, a short thread.
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First, we see that just prior to the pandemic hit, the U.S. had been blending 14 BGY of ethanol, but producing nearly 16 BGY (the difference was exported). The RFS mandate, though, says that 15 BGY should be blended. Why wasn't it?
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It's our fault. You see, we're all using slightly less motor fuel in recent years. In mid July '18, we maxed at 142.5 BGY of motor fuel. Just prior to the pandemic, that number had declined to about 140 BGY of motor fuel. I've since claimed that we've reached peak ethanol ...
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That is, for domestic use.
Assuming that a 10% blend is the practical maximum to expect (knowing many users do not use any ethanol) we would therefore expect something like 14.0 MGY would be blended. And as this shows, the ethanol national blend has been just under 10%.
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Assuming that a 10% blend is the practical maximum to expect (knowing many users do not use any ethanol) we would therefore expect something like 14.0 MGY would be blended. And as this shows, the ethanol national blend has been just under 10%.
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The only way to blend more is for the government to mandate higher than 10% blends (hence the E15 push of late).
But the data in the aggregate do not suggest that there has been significant demand destruction, and the waiver hollerers are barking up the wrong causation tree.
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But the data in the aggregate do not suggest that there has been significant demand destruction, and the waiver hollerers are barking up the wrong causation tree.
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