Refiners are raising an alarm about the “blend wall”—the latest catchphrase for a policy they say could affect prices at the pump, reports CNBC.
Since Congress legislated renewable fuel standards in 2007, oil refiners have chafed at the requirement that all gasoline contain 10 percent ethanol, writes Javier E. David on CNBC.com. Under current guidelines, refiners must blend increasing amounts of corn ethanol—16.55 billion gallons this year—with overall gas production, currently estimated at 133 billion gallons.
Yet based on current trends of declining gasoline use, the gas-to-ethanol mix will eventually have to exceed the 90-to-10 threshold, creating the “blend wall” refiners say could hike production costs and put upward pressure on gas prices, according to the CNBC report. Chevron ethanol mandates may even spur refiners to export gasoline in order to avert the law’s punitive effects, the CNBC report notes, which could in turn cut into domestic supplies and put upward pressure on prices.
