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ROAD AHEAD: A 98-100 octane requirement for transportation fuel would create demand for 4-5 billion more billion bushels of corn.

Is a big boost for ethanol coming?

Recent moves by EPA could lead to a large increase in demand for corn for ethanol.

My dad is one of those South Dakotans who likes using a 30% ethanol fuel blend in his car — one that isn’t a flex fuel vehicle.

A retired mechanic, he says E30 doesn’t damage his car and gives him the best bang for his buck.

He’d be pleased, then, that in its recent update to fuel regulations, the Environmental Protection Agency didn’t include a previously proposed rule that would make any blends above E15 illegal to use in conventional vehicles.

News that the rule was being shelved was lost in the celebration over the Trump administration's recent announcement to allow year-round E15 sales, says Doug Sombke, president of the South Dakota Farmers Union.

But dropping the rule was a big deal — maybe bigger than the E15 announcement, he says.

According to Sombke, new demand for ethanol created by year-round E15 will likely be slightly more than 1 billion gallons over current levels in the next five years. That would represent a new corn demand of just 300-400 million bushels. (This sounds like good news, but Sombke notes that the Trump administration’s waivers to oil refiners has reduced demand for ethanol and corn by about the same amounts.)

A new octane standard of 98-100, as is being discussed at EPA, could result in a demand for 15 billion more gallons of ethanol. Blends of 25% to 40% ethanol would be needed to reach such octane levels. That would translate into a demand for 4-5 billion more bushels of corn, Sombke says.

TAGS: Corn
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