Solid Base for Optimism
A November survey of ethanol producers reveals a solid base of optimism in the ethanol industry, along with the need to continue working on important issues.
When asked about their outlook, respondents expressed a stronger outlook for the year ahead than the next three years. That may be an indication that people see the cyclical nature of ethanol-as-a-commodity being in its favor for the next year, knowing it may be due for a downturn in the next couple of years. It may also indicate more comfort with the near term and more uncertainty when considering the outlook ahead.
When it comes to support for ethanol and the renewable fuels standard (RFS), the debate on the national level registers the greatest concern. But perhaps what is more important to note is that while local and regional support is less concerning, nearly a third of respondents are concerned that there isn't enough support for ethanol at their back doors, both locally and at the state or regional level. This raises the question whether individual plants and their state organizations need to assess the situation at home.
Another question asked the respondents about the availability of higher blends. About 70 percent of respondents report E15 and higher blends are offered in one or multiple locations near them. E85 availability is nearly as good, with 67 percent reporting E85-only is offered at one or many locations. Another indicator, of course, is how widespread ethanol-free gasoline still is, and 48 percent of respondents report ethanol-free gas is available at one or more locations around them. Looking at it from the other angle, more than 30 percent of ethanol producers don’t have higher blends of ethanol near them—a sign that there’s work to be done.
With the heightened focus on climate change in the public discourse, we also asked how important policy aimed at slowing carbon change is to the future of American ethanol production. There are those in the ethanol industry who see it as very or somewhat unimportant, about 18 percent. But a strong majority see a connection between the industry and carbon reduction, with 59 percent saying it is highly or very important.
In open-ended questions, ethanol producers were asked about their top three concerns. Support for the RFS and the challenge of meeting ever-tightening regulations were frequently mentioned. Not far behind were concerns over workforce training, retention and the challenge of attracting new employees in the face of an aging workforce. When it comes to plant-level concerns, yield improvements for ethanol rises to the top, along with the range of challenges every plant faces, from maintaining an aging facility, to implementing new technology, to building markets or reducing greenhouse gas emissions and carbon intensity.
Ethanol Producer Magazine invited its list of producers to participate in the survey, with a 14 percent response rate, which is considered a standard survey response level, with a confidence level of 95 percent and a margin of error of plus or minus 5.5 percent. While not a scientifically designed survey (responses were voluntary and not random), demographic questions indicate it was a representative sample, reflecting the industry’s distribution across states, capacity sizes and a range of job descriptions.
Author: Susanne Retka Schill
Managing Editor, Ethanol Producer Magazine