Cloudy Skies Ahead for Ethanol

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This story from Kent Misegades is good news, sort of. Rules set by the central planning committees in Washington for what we can buy and burn in our engines seem to be going sideways since they can’t respond quickly enough to market forces. Somehow, I suspect that it will still be the consumer that will be hurt when all of this shakes out.

Meanwhile, read on!

On Dec. 31, 2011, the 45 cent per gallon federal “blender credit” for ethanol finally ended with little fanfare, as described in this article from U.S. News.

Since fuel producers are still required to meet the RFS ethanol mandates in EISA 2007, the end to the credits will have no effect on the continued adulteration of our nation’s gasoline supply that also renders much of gasoline useless as an aviation fuel.

If an end to taxpayer subsidies was not hard enough on ethanol producers and distributors, the latest trends in the overall sale of gasoline must be especially foreboding. As seen in this chart from the DOE’s EIA, monthly deliveries of gasoline have dropped by a whopping 50% in the past decade, and are the lowest they’ve been since the early 1980s. This means that demand for ethanol, despite federal mandates requiring its sale, have also dropped dramatically, as reported by the Des Moines Register, which reports than many ethanol producers are now operating at a loss or are closing facilities.

Continue Reading at GA News

  1. idebenone01-03-13

    Since the 1980s until 2011, domestic ethanol producers were protected by a 54-cent per gallon import tariff , mainly intended to curb Brazilian sugarcane ethanol imports. Beginning in 2004 blenders of transportation fuel received a tax credit for each gallon of ethanol they mix with gasoline.