Ethanol Surplus May Lift Gas Prices:
"Reasons for the ethanol surplus are even more broadly in dispute, between producers and the oil companies. Gas companies are required under federal law to blend a certain number of gallons of ethanol into the fuel.
But refiners argue that some cannot reach that requirement because they are nearing or at the so-called blend wall, the maximum percentage of ethanol in gasoline that most gas stations can handle, 10 percent.
They also note that is the maximum level recommended by auto manufacturers for most cars.
Refiners blame Congress, arguing that the ethanol quota was set at a time when gasoline demand was expected to rise steadily.
Instead, demand has declined, and refiners, obligated to blend more ethanol than they can actually use, have resorted to buying a lot of ethanol credits, known as renewable identification numbers (or RINs), to meet the mandated levels."
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