That is somewhat true. The EPA does have a general 14 billion gallons of ethanol mandate to be used annually, but doesn't necessarily specify how it is used. It can be used up in the higher blends like E15, E20, E30, E50, E85 if folks bought more of those blends for the flex fuel vehicles. That would free up a lot of gasoline that didn't have any ethanol in it at all. States are where the problem lies. State governments play the games with ethanol. I have noticed that states that have a statewide mandate for E10, hardly offer any of the other higher blends in many locations. That is because they want everyone to use ethanol in all the gasoline, so they restrict the higher blends from sucking up the available ethanol. Now, a state like Iowa where I live, E0 is all over the place, along with all the higher blends I mentioned. The state doesn't dictate what people have to buy, they just allow a wide range of selections and let the consumer decide for themselves. Some stations might not offer ethanol free, but that is a retail decision probably based on a limited number of storage tanks, but not a state or federal mandate. Even with that, ethanol laced gasoline outsells non ethanol by a considerable margin. The pricing is what makes that happen, as ethanol free regular gas typically is in the 30-40 cent per gallon higher range than E10. Still, I can get ethanol free gas at any of a dozen locations within 15 miles of my house.
The pricing difference between E10 and E0 is a little extreme and the states play games with that as well. But in all fairness, fuels are a commodity market driven cost and gasoline is selling on the commodity market at a higher price than ethanol, so not all of the price difference is taxation or whatever. Closing price on ethanol at the commodity market today was $1.53. Gasoline closed at $1.59. Back a few years ago when fuel prices were in the stratosphere, the price difference was well over $1 a gallon, and even bumped $2 a gallon sometimes. That is why I used so much E85 back in those days. The difference in price at the pump was typically $1 or more cheaper for E85. So while it delivered a lower fuel economy, it still was cheaper to use on a cost per mile basis.