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Economist: expanding E15 could help ease pressure on diesel prices

Ag Economist Scott Irwin at the University of Illinois says expanding E15 consumption in the United States could indirectly help ease some of the pressure on diesel prices.

“To close the gap between the Renewable Fuel Standard mandate for ethanol and what we call the E10 blend wall,” he says. “Currently, that’s a gap of around 1 billion to 1.5 billion gallons of ethanol.”

Irwin says increasing ethanol use would reduce some of the pressure the RFS puts on biodiesel and renewable diesel. He says it would also drive down ethanol Renewable Indentification Number (RIN) prices and reduce the overall cost of the RFS by about two-thirds.

“It’s not a huge issue. You only have to increase the blending rate for ethanol from around 10.5 percent to 11 or 11.2 percent, and any cost worries about the RFS basically disappear.”

He says historically, it’s not an approach the energy industry has favored.

The Senate Agriculture Committee’s farm bill includes a provision allowing E15 to be sold year-round nationwide. The bill is awaiting consideration by the full Senate.