Ethanol at the Pump: Reflections, Predictions I Made Years Ago, and Why They Still Matter

I have been thinking about ethanol as a fuel for a long time — long enough that some of the ideas I sketched on napkins and in slides three, five, even seven years ago are now showing up in policy debates, research papers, and the quiet arithmetic of filling stations. It's a strange, almost vindicating feeling: the future I warned about has arrived in fragments, and those fragments both confirm and complicate the story I told earlier.

I want to lay out what I see now — mixing data, engineering, economics, and a little philosophy — and frequently remind you that these are not new emergent thoughts for me. I called attention to many of these tensions years ago, proposed concrete technical responses (some experimental, some conceptual), and now the world is slowly catching up.

What the numbers are whispering

The raw supply picture has been surprisingly steady. Recent EIA weekly series show U.S. fuel ethanol plant production hovering in the ~1,070–1,090 thousand barrels per day window in recent months — a stability that hides seasonal swings, policy shifts, and regional imbalances (Weekly Ethanol Plant Production).

I said this years ago: production volumes would stabilize while demand-side dynamics (vehicle compatibility, pump availability, price signals) would determine how much ethanol actually gets used in higher blends. Seeing the EIA numbers now feels like a quiet confirmation of that earlier reading — and a reminder that supply without aligned demand and infrastructure is a half-measure.

The blend landscape: many blends, many paradoxes

Ethanol blends are not a single product. We talk about E10, E15, E20, E85, E100 — each has a different technical profile and social footprint (Common ethanol fuel mixtures).

• Low blends (E5–E10) are widely compatible with modern vehicles and give modest emissions wins.
• Intermediate blends (E15–E25) sit in a gray zone: technically feasible for many modern cars, yet controversial for older vehicles, small engines, and certain equipment.
• High blends (E70–E85 and E100) offer exceptional octane and knock resistance but require different fuelsystems and face cold-start and infrastructure constraints.

I raised this multipart nature years ago. I argued then that policy and engineering should stop treating "ethanol" as a single lever and instead manage a portfolio of blends targeted to use-cases. That portfolio approach is increasingly discussed in engines and fuel-separation literature (Study of High-Compression-Ratio Engine Combined with an Ethanol-Gasoline Fuel Separation System). Hearing engineers and automakers outline similar thinking now is validation of that earlier line of thought — and a call to move beyond repeating the problem.

Price, choice, and the stubborn human element

Consumer choice is brutally price-sensitive. Recent econometric work shows very high own-price elasticities for E85 in U.S. states — numbers like −2.8 to −4.5 for short-run elasticities and even higher in the long run in some estimates (Consumer Choice of E85 Denatured Ethanol Fuel Blend). In plain terms: if E85 is not priced attractively relative to gasoline on a cost-per-mile basis, many drivers simply won't switch.

I said this before. Years ago I argued that without financial parity (or better), voluntary adoption of high-ethanol blends would stall. We now have empirical confirmation. That earlier warning was not a pessimistic contrarian stance — it was a pragmatic diagnosis rooted in observing consumer behavior.

Technical limits: cold starts, materials, and small engines

Higher ethanol blends are powerful anti-knock agents — they enable higher compression and greater thermal efficiency — yet they create practical problems:

• Cold-weather starting issues and vapor pressure limits push suppliers to use winter E70/E75 blends for E85 in cold regions (Common ethanol fuel mixtures).
• Corrosion and material compatibility remain concerns for fuel lines, seals, and small engines. That YouTube short demonstrating ethanol damage to small engines — "and this is why we don't use ethanol fuel in small engines folks" — captures a practical risk that product designers and fleets have been wrestling with for years (YouTube short).
• The broader technical literature points to clever ways to use ethanol more efficiently: on-board separation of ethanol from E10 to create a high-octane stream used only when needed (the Octane-on-Demand concept) is one such design solution that I highlighted years ago and that automotive researchers have actively developed (Octane-on-Demand and on-board separation work).

Again: I raised these trade-offs earlier — the promise of ethanol's octane vs. the pragmatic limits. I proposed that if ethanol was to scale sensibly, we needed smarter deployment (selective use, not blanket replacement). Seeing the technical community advance membrane and separation ideas today feels like watching an old idea being matured.

Infrastructure: the quiet bottleneck

E85 and other high blends need dedicated storage, pumps, and distribution. The real cost is often not the ethanol molecule but the logistics: separate tanks, blender pumps, and retailer willingness to carry multiple fuels (and the regulatory and tax regimes that govern them). In many places the E85 network is sparse; in others, E85 exists but with winter blends, seasonal shifts, and complicated labeling (Common ethanol fuel mixtures).

I emphasized years ago that infrastructure inertia would be the primary limiter. You can subsidize vehicles, nudge automakers, and tweak standards — but unless the pump is there and the price-per-mile math works, adoption stalls. That was not a prediction intended to be clever; it was a systems observation. Today it reads like a map of missed opportunities.

Quality and accountability: the small, ignored things matter

Fuel quality matters. Research as niche as measuring water in hydrated ethanol by gamma-ray attenuation shows the kinds of quality-control work that supports large systems (Evaluation of Water Amount in Hydrated Ethanol Fuel by Gamma-ray Attenuation Technique). If fuels are adulterated, or if water content exceeds spec, reliability and emissions outcomes change. I called attention to operational integrity years ago — because a fuel program is only as good as the weakest logistical or quality link.

Policy, taxes, and the choreography of incentives

Policy has to care about details. Iowa's fuel tax rules and their different treatment for E-15 and higher blends show how tax design shapes behavior and inventory accounting (Iowa Fuel Tax Information). Fuel tax rates, inventory returns, and blending deductions become operational constraints for blenders and pumps. I urged policymakers — years ago — to synchronize fiscal policy with on-the-ground distribution realities: one cannot mandate blends without thinking how terminals, suppliers, and retailers will comply.

Seeing granular tax guidance now — and the complications it creates around inventory returns and blending deductions — confirms a theme I raised earlier: policy that ignores logistics and market incentives becomes painful to implement.

The environmental and social reflection

Ethanol as a lever against oil dependence and climate risk is real but complicated. Low blends provide modest CO2 benefits at modest risk; higher blends need lifecycle scrutiny (feedstock, land use, fertilizer, processing). When I argued years ago for a nuanced, use-case-driven strategy for ethanol, the point was both environmental and ethical: we should deploy renewable molecules where they deliver the most social value (e.g., high-octane uses that enable engine downsizing and better fleet efficiency), not simply because we have capacity to produce more.

That argument predicted the conversation we're having now about cellulosic feedstocks, Octane-on-Demand, and targeted decarbonization pathways. The world has started listening.

Why my old notes matter — and what they teach me now

I keep returning to what I wrote and said years ago because the same structural tensions persist:

• Supply stability vs. demand fragility.
• Technical promise vs. product realities (cold start, materials, small engines).
• Price sensitivity of consumers vs. the inertia of infrastructure.
• Policy ambition vs. administrative detail.

I had suggested years ago that the path forward was not a single, maximal substitution of gasoline with ethanol, but a smarter, modular approach:

• Use higher-octane ethanol selectively (Octane-on-Demand, on-board separation, targeted DI use) where it unlocks real efficiency gains (Study of High-Compression-Ratio Engine Combined…).
• Align price signals so consumers see cost-per-mile benefits for E85 and other high blends (Consumer Choice of E85 Denatured Ethanol Fuel Blend).
• Invest in infrastructure incrementally and where it yields greatest marginal value.
• Protect small engines and nonroad equipment with clear labeling and alternative fuels or separations; the YouTube clip showing small-engine damage is a vivid, low-cost reminder that misapplied blends hurt people and trust (and this is why we don't use ethanol fuel in small engines folks).

I raised these steps years ago. The fact they reappear in research and policy conversations today is not merely gratifying — it's urgent. Validation without action is just a memory.

A final, personal note

It is easy to be swept into predictions that sound dramatic. I prefer a humbler posture: make careful observations, sketch pragmatic solutions, and keep checking reality against those sketches. I said years ago that ethanol would not be a single silver bullet, but rather an ensemble of technical, economic, and policy instruments that must be orchestrated. The evidence that’s emerged — EIA production stability, the consumer elasticities for E85, the engineering work on Octane-on-Demand, the real-world headaches of small engines and winter blends, and the mundane complexity of tax and terminal rules — all reinforces that ensemble view.

So I repeat, because I said it before and because the present makes that earlier voice relevant: years ago I predicted these trade-offs and proposed parts of the remedy. Today, as the world wrestles with those same questions, I feel a strange mix of validation and urgency. Validation because the logic held; urgency because now, with more data and more grounded experience, we can convert earlier insights into concrete systems and standards that actually work.

I remain invested in the idea that renewable molecules like ethanol can play a meaningful role — not by blunt substitution, but by being integrated thoughtfully into a larger design for cleaner, smarter mobility.

---

Regards,
Hemen Parekh