U.S. ethanol production might reach record level for 2017

Weekly U.S. ethanol production has risen 5% to 1.02 million barrels per day through the first six months of 2017, from the same period in 2016, according to the U.S. Energy Information Administration. Ethanol production rose to a record level of 1.06 million barrels per day in the week of Jan. 27. https://www.eia.gov/

So far this year, the weekly average has been more than 1 million barrels per day, except for a few weeks in April, when ethanol plants usually undergo seasonal maintenance. If production levels remain high through the second half of the year, “2017 will set a new record for annual fuel ethanol production,” according to the EIA.

“Corn is the primary feedstock of ethanol in the United States, and large corn harvests have contributed to increased ethanol production in recent years.” U.S. corn production rose 11% to a record 15.1 billion bushels in the 2016-2017 harvest year, from the previous harvest year, according to the U.S. Department of Agriculture. https://www.usda.gov/

“Increased corn production and relatively stable corn prices have helped make increased ethanol production more profitable and less susceptible to corn price shocks that had affected ethanol profitability and output in the past,” according to the EIA.

In January, U.S. ethanol plant capacity rose to 15.5 billion gallons. Plant capacity risen for four consecutive years. Production is expected to reach 15.8 billion gallons in 2017. Production is expected to exceed capacity this year because new capacity has likely been added and ethanol plants can operate beyond their capacity.

In the United States, ethanol is used “as a blending component in the production of motor gasoline and mainly blended in volumes up to 10% ethanol, also known as E10,” according to the EIA. Gas consumption has risen about 7% to 9.3 million barrels per day in 2016, from 8.7 million barrels per day in 2012, resulting in a 7% increase in additional ethanol demand.