NOT THE KIND OF RECORD WE WANT TO SEE
U.S. ethanol producers set a production record last week, but not the kind we’d hope to see. Last week, ethanol plants produced the SMALLEST volume of ethanol since the U.S. Energy Information Administration (EIA) started keeping records in 2010. Click the link above to read more
According to the EIA, output dropped 2.8 percent to 770,000 barrels a day. Stocks of ethanol stood at 20.5 million barrels, a 2.3% increase from the week before. Expressed as a percentage of daily gasoline demand, daily ethanol production was just 9.05%, the lowest rate since August 2012.
“Demand for gasoline has been low this winter. We haven’t moved E-15 into the marketplace. Margins are very low. What we’re seeing here is that ethanol companies are throttling back, responding to market signals,” said Dave Loos, IL Corn director of technology and business development. “This seems to be following the same path as the national economy for the last three months.”
Although the U.S. Environmental Protection Agency approved E-15 as a new fuel last year, there remain significant regulatory hurdles to it coming to market.
“The ethanol plants are looking to get through the next quarter in as good a shape as possible, waiting for the typical increase in gas demand during the spring and summer months,” Loos explained.
“It’s more important than ever that we get E-15 into the marketplace. IL Corn and the Illinois ethanol industry realize this, which is why we’re working so diligently in Springfield to move the sales tax incentive from E-10 to E-15 in House Bill 165 and Senate Bill 52,” said Loos.
Loos encourages all ethanol supporters to support these two bills for passage in the IL General Assembly.
“We’re seeing an all-out push from the oil industry against ethanol and all the benefits in can provide to the consumer,” Loos added.
Midwest production was down 2.9% (or 6.5 million gallons) and any other regions remained stable. An estimated 2.1 billion gallons of yearly capacity is estimated to be shut down.