Now this graph is remarkable.

It’s pretty much an admission by EIA that the Congressionally-mandated 2007 Renewable Fuel Standard (RFS) goal of 35 billion gallons of ethanol usage per year by 2022 will not be met. Not only that, EIA arrived at that conclusion in last year’s outlook, AEO2009.

Consider the makeup of the ethanol blend. Large portions of it are projected to be made up of “biomass to liquids” and “cellulosic ethanol”, two sources which don’t even exist at present.

And the EIA is giving ethanol and ethanol blends a significant price advantage in their assumptions, to make it more price competitive with gasoline:

Retail prices for E85 (a blend of 70 to 85 percent ethanol and 30 to 15 percent gasoline by volume)are projected to shift from a volumetric basis to an energy-equivalent basis relative to motor gasoline, in order to meet the renewable fuels standard (RFS) … . In 2022, the retail price of gasoline is $3.41 per gallon while the price of E85 is $2.63 per gallon, reflecting the higher energy content of gasoline versus E85 and delivering a similar cost for the two fuels per mile traveled.