Renewable Energy Report: June 2017 Report

U.S. ethanol production was at 1.02 million barrels per day for the week ending May 26, 2017, according to the most recent Weekly Ethanol Plant Production report from the Energy Information Administration (EIA). Figure 1 illustrates weekly production of fuel ethanol (thousand barrels per day) and weekly ending stocks of fuel ethanol (thousand barrels) from May 24, 2013, to May 26, 2017. The ending stocks of fuel ethanol were at 22.763 million barrels for the week ending May 26, 2017.

The Low Carbon Fuel Standard (LCFS) is a regulatory framework adopted by California to reduce greenhouse gas (GHG) emissions in the state. The program encourages the use and production of a variety of low-carbon and renewable alternatives such ethanol, biodiesel and renewable diesel, which contribute to the reduction of greenhouse gas emissions and replace higher carbon petroleum-based fuels. The goal for LCFS is to reduce the carbon intensity (CI) of California’s transportation fuels by at least 10 percent by 2020. CI accounts for the carbon dioxide emissions related to the extraction, processing and distribution (life cycle) of gasoline and diesel and their corresponding substitutes. Hence, alternative fuels with lower carbon intensity, measured in grams of CO2 equivalent per Megajoule of energy (gCO2e/MJ), are deemed as contributing more to reach the goal of the program. 

A recent publication from the Food and Agricultural Policy Research Institute at the University of Missouri indicates U.S. ethanol net exports will double from 2017 to 2026, from one billion gallons to 2.5 billion gallons. Rising global crude oil prices are the main driver.