The November Oxygenate Report released by the Energy Information Association shows that ethanol production continues to rise. The daily average production of ethanol for the month of November was 479,000 barrels per day. The total monthly production came it at 14,356,000 barrels up from the 14,018,000 a month earlier. This is an increase of 40% more ethanol than was reported from the previous year during November.
Ending stocks of ethanol for the month of November was slightly lower than the preceding month at 11,194,000 barrels. The graph at the end of this article shows production and ending stocks from 1999 to the present. What can be gained by looking at this graph is that as production continues its climb, ending stocks are showing signs similar to last year when stocks declined for a number of months before increasing.
In the latest updated numbers from the Renewable Fuels Association, there are currently 139 plants online with the capacity to produce 7,888.4 million gallons of ethanol. An additional 61 plants are under construction along with 7 plants under expansion. These plants will have a total capacity of production of an additional 5,536.0 million gallons, which will give a total US production of 13,424.1 million gallons.
In related news, statements made recently by US Energy Secretary Bodman are causing some concern in the US ethanol industry. Secretary Bodman stated that ethanol tariffs that are currently imposed to "protect" US ethanol producers would more than likely be addressed in the 2009 US Budget due out in a week. "As best I can tell, this industry is pretty close to being able to stand on its own," stated Bodman. Currently there is a 54-cent per gallon tax on imported ethanol that will expire at the end of 2008. One country that would like to see this expire is Brazil as it is currently hindering sales of their ethanol made from sugarcane into the US market. In the past Congress has voted to extend this tariff and the Senate Finance Committee approved a measure that would extend the tariff for 2-years last October. We will have to wait and see if Congress would go along with such a request from the Administration. Allendale will continue to monitor this development.
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