October Ethanol Production Up, Stocks and Imports Down

October ethanol production was up from September numbers but slightly below the high set in August. Imports for the month of October were down and with consumption hitting a new high, stocks fell from it's high point set last month.

Ethanol Production Numbers in Gallons
	Production	Imports	Stocks	Consumption
October 2008	842,016,000	25,830,000	638,064,000	901,530,000
September 2008	806,274,000	103,572,000	671,748,000	863,142,000
August 2008	842,478,000	81,102,000	625,044,000	852,348,000
July 2008	799,764,000	57,120,000	553,812,000	819,840,000
June 2008	736,848,000	65,982,000	516,768,000	791,910,000
May 2008	778,806,000	36,372,000	505,848,000	793,968,000
April 2008	708,456,000	60,942,000	484,638,000	763,182,000
March 2008	730,674,000	15,456,000	478,422,000	707,238,000
February 2008	631,050,000	20,286,000	439,530,000	660,114,000
January 2008	664,356,000	20,790,000	448,308,000	679,308,000
December 2007	636,762,000	8,904,000	442,470,000	674,352,000
November 2007	602,592,000	16,506,000	471,156,000	628,800,000

Source: - Energy Information Administration

Grocery Manufacturers Association: Trust Us On Ethanol Facts

I have been on the Grocery Manufacturers Association (GMA) website hunting a quote I saw sometime back and happened across a document titled 'Food to Fuel Fact Sheet'. While glancing through it I noticed this section.

Food-to-fuel policies have little impact on gasoline prices. Because ethanol displaces a small fraction of the US gasoline supply and a tiny fraction of global crude supplies, changes to food-to-fuel mandates and subsidies would have little or no impact on gasoline prices. Overall, ethanol production in 2007 displaced less than 4 percent of the nation’s gasoline supplies in 2007, when relative energy values are considered. In fact, one study found that the ethanol tax credit and the ethanol mandate will increase gasoline consumption by more than 600 million gallons by 2015.

The last line is what caught my attention since I have never seen this study or even a summary of it anywhere. So I followed the reference to this article in the Chronicle Online by Cornell University. In the article it explains just how they think the ethanol tax credit and the ethanol mandate will increase gasoline consumption.

Now introduce a tax credit alongside the mandate: Because the ethanol price premium, due to the mandate, exceeds the tax credit, there is no incentive for blenders to bid up the price of ethanol as before. And market prices of ethanol cannot decline due to the mandate. Instead, blenders will offer a lower total fuel price -- ethanol plus gasoline -- to consumers to take advantage of the tax credit offered to them by the government. The lower price increases gasoline consumption and thus increases the market price of gasoline and oil.

So on one hand they are saying that ethanol doesn't reduce the price of gasoline. On the other they are saying that ethanol will increase the consumption of gasoline by reducing the price. My guess is that I was supposed to just trust the information they were providing as well reasoned fact without checking the reference materials and thus uncovering their attempt at deception.

POET plant begins $2 million expansion project

POET issued a press release yesterday saying that their Laddonia, Mo. plant is undergoing a $2 million dollar expansion which will allow it to produce an additional five million gallons of ethanol. According to the press release the expansion is already underway and is expected to be completed in April 2009.

I mention this development as a reminder that although the news lately has given the impression that the ethanol industry is on it's last leg there are still companies within the industry that see a bright outlook ahead and are investing in more capacity.

Source : POET Press Release

September Biodiesel Numbers Down

September biodiesel production number were down slightly to 64,134,000 gallons from 66,696,000 gallons in August. Part of the difference can be explained by the fact that September has 30 days whereas August has 31, but not all of it. Even adding another days worth of production would bring the total about 400,000 gallons short of the August number.

September 2008 - 64,134,000 gallons
August 2008 - 66,696,000 gallons
July 2008 - 67,410,000 gallons
June 2008 - 63,378,000 gallons
May 2008 - 52,500,000 gallons
April 2008 - 52,836,000 gallons
March 2008 - 49,056,000 gallons
February 2008 - 43,260,000 gallons
January 2008 - 50,736,000 gallons

2007 - 489,804,000 gallons

Source : EIA : Biodiesel Overview

Is Ethanol Off The Hook For Rising Food Prices?

There have been several articles over the last few days that articulate the disconnect between the rhetoric waged by the anti-ethanol campaign in blaming food prices increases on ethanol production and the fact that food prices have remained high despite the recent fall in commodity prices. Here is a sampling of those articles.

Investigation: Inside the ethanol subsidies controversy

Fact vs. Fiction on Food vs. Fuel

It is nice to see that the food versus fuel issue is dying down somewhat but as one article points out the battle being waged against ethanol isn't over just changing terms.

There are signs that the GMA and Food Before Fuel lobby are changing tack a little in attacking ethanol. There also seems to be a slight de-emphasising of the price-rise issue to instead concentrate on ethanol's supposedly detrimental affect on the environment.

But as all the articles point out the campaign has created an atmosphere in which food companies can increase their profits and after all that is what trade organizations such as the GMA are supposed to do.