The Industry Demands Greater Demand

By Mike Bryan | January 04, 2010
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2010 will be a pivotal year for many ethanol producers. The need for increased ethanol demand is at the breaking point and, for many in the industry, greater demand for their product can't happen too soon.

While we wait for the U.S. EPA's decision on E15, the industry is working to increase demand in other areas. The Renewable Fuels Association and the American Coalition for Ethanol have teamed up to expand fueling infrastructure by promoting the installation of blender pumps throughout the U.S., and E85 pumps are opening in parts of the country, such as California, where they have been lacking until recently. U.S. automakers say that they won't produce more flex-fuel vehicles until E85 infrastructure is increased, so the industry is taking the initiative to make that happen.

State mandates and related ethanol programs will also impact demand for ethanol this year. Associate Editor Erin Voegele explores many state renewable fuel standards in her article, "Incentives: It's All About Location, Location, Location." At least 32 states currently have some form of ethanol-specific incentive and more will take effect in 2011. As often happens, the states will lead the way for federal programs and should also guide the EPA to greater ethanol utilization.

Editor Kris Bevill tackles the topic of industry expansion in her article, "Searching for the Next Iowa." She spoke with several potential ethanol producers who plan to locate in Florida for one main reason: demand for their product. As the Midwest market becomes saturated, producers are moving into parts of the country that do not have a local supply of ethanol, and Florida is one of the hot spots.

The EPA began working on labeling requirements for E15 in December, which gives a strong indication that it will approve the new blend by mid-year. And while approving the waiver is essential to moving the blend wall, the industry won't sit idly by and wait for a federal agency to dictate demand for its product. The 2010 energy outlook from the U.S. Energy Information Administration predicted that biofuels will account for the entire growth of U.S. liquid fuel consumption between 2008 and 2035 and that renewable fuel standard targets will be exceeded by 2035. Pending commercial cellulosic ethanol production, combined with greater productivity from the corn-based plants, will help the industry exceed these expectations, proving that the supply is there to meet the demand.

That's the way I see it.