U.S. ethanol production declined slightly last week seeing a more than 2% drop. However, the industry has seen major gains as a whole this year.
Compared to the same time last year, production is up by 64,000 barrels a day, and while exports were up by 77% this past week, stocks this year are still holding strong. Up nearly 2 million barrels year-over-year.
Geoff Cooper, the President and CEO of the Renewable Fuels Association, says that it has been a year of growth for the ethanol industry.
According to Cooper, “It’s been a great year for the ethanol industry. We are on pace to be at record production or very near record production somewhere around 16 billion gallons we think by the time the year is over with, and part of what’s driving that is very strong demand both domestically but especially in the export market. We’re on track to have a record year for ethanol exports, somewhere between 1.8 and 2 billion gallons, we think, will be exported. That would be the highest share and the largest volume that we’ve ever exported, which is great to see. I mean it’s really helped support, you know, the supply-demand picture and profitability for the industry this year. You know, the industry is in great shape from a profitability standpoint, from a feedstock availability standpoint. We are going to have a large corn crop this fall and, you know, for the farmers we’re talking to here who are very concerned about corn prices, we remind them that, ‘Hey, we’ll take whatever you can send us.’ We’re going to grind 5.5 billion bushels of corn into ethanol this year and we want to do more than that. So, that’s where we need to be partners with our farmer friends in expanding the market for ethanol through E15 and longer term through sustainable aviation fuel.”
Another way they are looking to expand is by gaining market access to California. The Renewable Fuels Association is now calling on the state to allow the sale of E15 blends. They believe its an easy way to enhance the state’s low carbon fuel standard.
RFA Chief Economist, Scott Richman says that E15 offers consumers a unique opportunity to not only lower the cost of gasoline but also cut greenhouse gas emissions and pollutants. The sale of E15 could shave off as much as 20 cents a gallon off the cost of gasoline in California.
The state currently has the highest average fuel prices.
If permitted it could result in a statewide annual savings of nearly $3 billion dollars.
Unfortunately, the Senior Vice President of Industry Relations and Market Development at the RFA says a few challenges still remain.
Robert White states, “California is the last holdout, the last state where you can’t sell E15, and ironically, given their low carbon fuel standard and our low carbon fuel that makes E15, we could sell it for anywhere from 20-25 cents a gallon less today in a state where fuel prices are well over $5 a gallon. We recently had some discussions with the California Air Resources Board that has to approve E15 and unfortunately, we couldn’t come to an agreement on many things. And so, it will at least be another handful of years before E15 is approved because we haven’t started the rulemaking process.”
RFA President and CEO Geoff Cooper says that it is time for California to catch up to the other 49 states that have already allowed consumers to choose lower-cost, lower-carbon E15.
