There have been three major ethanol producers that have declared bankruptcy in the past 6 months (VeraSun, Panda Energy and White Energy) as well as several smaller ones. The problem is the high cost of manufacture, especially high corn prices, and slackening demand driving down its price to the point of being unprofitable. Ethanol has now lost its cost advantage, with gas droppping dramatically from last year's highs. Outside the Corn Belt, it is significantly more expensive than gas. In Florida last week the ethanol price was $2.105 and pre tax gasoline in the $1.70s. The solution: more government intervention.
The pressure is on Congress to force distributors to blend to 15% to solve the problem government caused in the first place. Lost in all of this, is it would void the warranties of millions of cars in the US. But the problem is far worse for the marine industry. Even 10% ethanol is causing severe problems to fuel systems. It primarily shows up in fuel lines of older boats where the inner liner is destroyed by the corrosive action of the ethanol, causing it to flake away and clog the fuel system (see photo of fuel line flaking that clogged the fuel pump of a 200 hp Mercury EFI engine). Fuel pumps themselves are susceptible to degradation. In boats with fiberglass fuel tanks, the ethanol and co solvents attack the resin and produce a gooey liquid that clogs lines and fuel filters. All cause engine failure.
Before 2006 fuel containing ethanol was segregated out of the marine distribution system. With the Energy Policy Act of 2005, Congress mandated minimum amounts ethanol that had to be blended into motor fuel. Currently it is 10.5 billion gallons for this year and will increase to 36 billion gallons in 2022. It is now very difficult to assure a marina they are getting ethanol free fuel. Oregon on the other hand requires all marine fuel to be E10, despite efforts of boaters to make the dangers known. The boating industry addressed the problem for production in 2006 and after. But being rational people, they certified their upgrades to the 10% standard. Fools they were. But then again they are dealing with Corn Belt politicians who are not trying to save the planet, they are only trying to get themselves reelected.