Growing the ethanol market

U.S. ethanol is not cost-competitive abroad, where it competes on an even playing field with Brazilian sugarcane ethanol, so to grow (and reach the RFS mandates) it needs to grow the domestic market:
"Without increasing the blend of ethanol to E15, it will be impossible to achieve the targets set in the Renewable Fuel Standard and there will be no market for cellulosic ethanol," said Jeff Broin, POET chief executive officer. "POET is spending tens of millions of dollars to commercialize the production of ethanol from harvest leftovers but needs E15 to be certain there will be a market for the product."
The clever (but erroneous) framing is that not meeting the ethanol RFS would be the end of the world.

Update: I learn a few things from a comment exchange with Geoff Styles.
R: I recently read Turning Oil Into Salt (which has a lot to like and a lot to dislike - I wrote a rambling review for anyone interested), which would have you believe that the incremental cost of making a car flex-fuel is minimal (in the low hundreds of dollars range above a normal car). If this is true (and I would be interested to hear informed views on whether it is), it would be worth at least looking at the cost/benefit of mandating or incentivizing flex-fuel vehicles, particularly if the alternative to satisfy the ethanol lobby is an E15 ruling that doesn't make economic and/or environmental sense.

Geoff: The Big 3 have already committed to making half their new cars flex-fuel, and with GM and Chrysler beholden to the govt. a 100% target won't be far behind. But even if 100% of all new cars were FFVs starting this year, there would still be many millions of cars vulnerable to damage from higher ethanol blends for many years to come. The problem isn't the FFVs, of which there are already enough to boost E85 sales dramatically. It's making the entire E85 proposition, with its high costs for service station owners and consumers alike more attractive. Does 75% of the energy of gasoline for 86% of its cost sound like a good deal to you?

R: Agree that E15 could be bad for legacy vehicles (I was thinking of FFVs as an alternative demand sink to raising the blending limit to 15%). I think raising the limit would be a bad idea.

And agree that expanding E85 infrastructure will take investment, but the economics of ethanol itself could become attractive enough to justify that investment (and the energy-adjusted price ratio with gasoline has and will continue to fluctuate based on ag supply-demand, crude prices and refining economics).

I don't really like corn ethanol, but if it's a choice between E15 or more FFVs to satisfy the ethanol lobby, the latter sounds more attractive to me.

Geoff: R,
When you put it that way, I agree, though the old saw about horses and water comes to mind. There are sufficient FFVs on the road already to absorb 10x the E85 currently sold. Understanding why they're not buying more of it could be key to figuring out how to make it work on a mass-market level. Is it a critical mass issue on either infrastructure or vehicles, or do consumers just not like the value proposition and attributes?

R: I hadn't realized there were already so many FFVs in the U.S. - sounds like that can't be a constraint now. Do you have any idea how much ethanol E85-equipped stations sell? That might shed some light on whether the issue is midstream infrastructure vs. poor value proposition.

Update 2: ... in which my poor reading skills and attention to detail are exposed:
Geoff: R,
The figure is cited and linked in the posting.

R: So it is :) Good stuff.

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