The headlines on the latest Renewable Fuels Association (REA) press release are: October production ties all time high, yearly production, demand for ethanol up more than 25%.
This somewhat contrary to what I have been reading in the popular press, that frequently says demand is down. We are still importing expensive ethanol to meet demand. However, the capacity of new plants probably will double over current capacity in the next two years, making me wonder whether we can absorb that much production, forcing ethanol prices down (that will be good for consumers, but bad for producers). Further, that production rate will put a strain on corn production forcing prices of corn up and possibly jeopardize our supply of food corn. No significant cellulosic ethanol production will come on stream in the next two years, so that alternative is no relief for corn supplies during that period. We need to put a moratorium on building more corn ethanol plants which only have a small net energy gain, and wait for cellulosic ethanol to become viable. We should stop subsidizing the construction of new corn ethanol plants.
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