The ethanol market exists today because of the Clean Air Act coupled with the Renewable Fuels statute which forces compliance through Renewable Identification Numbers RINs.

The Small Refinery Exemptions initially granted have evolved into a food fight which the above link addresses.

In order for ethanol to transition to a fully stable self standing market alternative.. we still have a ways to go.  I favor free market options but realize that the refiners could put ethanol on the back burner.. for a long time.

There are many.. misconceptions about ethanol on this board.

1) Yes ethanol is mandated through the RFS.

2) Refiners can create high octane gasoline through the use of Coker’s and Catalytic Crackers.. these units are expensive to build with lower overall gasoline output.. hence they have a higher net cost than simply blending lower octane gasoline with ethanol.  Since these units are already in place.. a sunk costs.. there’s no incentive.. no market pressure to force their abandonment.  I don’t believe market forces would force increased ethanol adoption even though it is a cheaper superior product in many ways due to this market structure.

3) ethanol is used regionally as current compliance offers E 85 at below market costs because of the need for RINs to meet RVO compliance.. aka someone in Iowa buys E 85 below $2 in order to allow several in Massachusetts (the coasts) to buy non ethanol gasoline.

4) Pro Ethanol advocates.. Corn Boards.. Ethanol boards DO NOT have the resources to compete for consumer education vs Petroleum (the largest industry on the planet) interests.  Which is why the consumer is hood winked on so many issues.. such as “ethanol as an octane is bad for your engine”.. even though it is quite similar to other octane enhancers which are petroleum based.. aka lower energy, corrosive and volatile.  While being non carcinogenic.

5) Ethanol is a high octane source, extremely affordable as well as renewable and favorable production vs current sources from Russia, the Middle East, the Gulf subject to hurricanes.. or Canadian tar sands.

6) upward trending corn yields insure an abundance of feedstock to increase ethanol production. 

7) The ethanol boom has transformed US agriculture.  The current landscape would look a lot different.. if we would have had $2.50 corn going into Government storage programs.. then subsidized exports.. as occurred before ethanol came along.. tying the corn market.. “closer” not 100% (see 2026) to the Crude oil market.

8) Input suppliers.. Equipment manufacturers, Seed Chemical and fertilizer companies have benefited as much or more than US Farmers from the ethanol boom.  Again, see 2026.

just a few thoughts.. I’m sure we could list more.