The Wichita Eagle: ‘Blend wall’ could mean oil industry ethanol costs will be passed on to consumers

September 5, 2013

Dan Voorhis, September 4 – The price of corn is down. That’s about where the good news ends for ethanol makers in 2013.

The trends that have punished the industry for the past few years appear to be getting worse.

The industry is now basically providing all of the ethanol needed to satisfy the government’s mandated limit – and the marketplace’s demand – for blended fuel, which is usually 10 percent ethanol.

The industry has hit what’s known as the “blend wall.”

One result is that smaller, higher-cost producers are being forced out. For instance, the Abengoa ethanol plant in Colwich shut down in 2011 after about 25 years in operation.

Hitting the blend wall is causing a host of complications for the ethanol industry, the Environmental Protection Agency, Congress, the petroleum industry and, maybe, the driving public.