Ethanol: Bleak presence, brighter future
1) E-15. Acceptance of E15 in the motor fuel industry has been very slow. Retail fuel marketers offer a number of reasons for their reluctance to market this fuel, but over time its use may increase.
2) E85 is another alternative. It can be used only in flex-fuel vehicles and its market has been limited by (1) the small number of retail fuel stations selling it, (2) a limited but increasing percentage of the vehicle fleet that is made up of flex-fuel vehicles, and (3) lack of competitiveness of E85 with gasoline and E10 because of its much lower fuel mileage per gallon.
3) Increased foreign use and competitive U.S ethanol prices from lower-cost corn could lead to expanded export demand for ethanol.
The price of ethanol is currently higher than gasoline, which is quite abnormal, and should soon return to a lower price level. Consumption of ethanol may tend to decrease because of the blend wall and increased auto mileage economy. However, increased use could be spurred by higher blends of ethanol along with lower production costs, as well and with increased international use and higher exports.
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