The report found that for any pipeline to be economically viable, it would need to ship 1.3 Bbbl/a but that current demand only amounted to 0.9 Bbbl/a. This projection includes demand from low-level ethanol blends (10 per cent ethanol, 90 per cent gasoline or E10) used in conventional vehicles and high-level ethanol blends (85 per cent ethanol, 15 per cent gasoline or E85) used in flexible fuel vehicles.

The report found that if the Environmental Protection Agency approved an increase in the per cent of ethanol allowed for blending in motor gasoline, demand for ethanol could increase to level that would make an ethanol pipeline economically viable.

While the report was assessing the feasibility of a hypothetical ethanol pipeline, in 2009 Poet Inc. and Magellan Midstream Partners LP formed a joint venture to assess the feasibility of an ethanol pipeline.

The proposed 2,897 km ethanol pipeline would run from ethanol production facilities in the Midwest, starting at Davison County, South Dakota, to distribution outlets in the northeast USA, ending in Linden, New Jersey. Once the pipeline is found feasible, it could be operational as early as 2014.

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The two companies welcomed the Energy Department’s report in a joint statement saying “A large scale pipeline project is feasible under certain conditions and that a federal loan guarantee is necessary to move forward.”