EIA revises forecast for 2014 ethanol production, summer blending

By Erin Voegele | April 10, 2014

The U.S. Energy Information Administration included a slight revision of projected 2014 U.S. ethanol production in the April issue of its Short-Term Energy Outlook. The EIA now predicts ethanol production will average 908,000 barrels per day this year.

The new estimate is in line with the EIA’s forecast February STEO forecast of 908,000. In March, the administration increased its estimate slightly to an average of 910,000 barrels per day. Over the past several months, the monthly forecast has fluctuated from a low of 900,000 barrels per day made in in the December STEO to a high of 913,000 barrels per day made in the January STEO.

In the April STEO, the EIA reported that logistical constraints led ethanol production to decline from an average of about 900,000 barrels per day in January and February to only 890,000 barrels per day in March. The logistical constraints are attributed primarily to railroad delays resulting from extreme winter temperatures in the Midwest. The EIA specifies that these constraints are expected to be short-lived as warmer temperatures arrive and ethanol production rebounds.

On a quarterly basis, ethanol production is expected to average 910,000 barrels per day during the second, third and fourth quarters of this year. Next year, production is currently forecast to average 920,000 barrels per day in the first and third quarters, and 930,000 barrels per day in the second and fourth quarters.

Biodiesel production averaged 87,000 barrels per day in 2013 and is forecast to average 75,000 barrels per day this year and 77,000 barrels per day in 2015.

During the April-through-September summer driving season this year, the EIA forecasts retail gasoline prices will average $3.57 per gallon. The projected monthly average regular gasoline is expected to fall from $3.66 per gallon in May to $3.46 per gallon in September. Retail gasoline prices are expected to average $3.45 per gallon in 2014 and $3.37 per gallon in 2015. In 2013, the average price was $3.51 per gallon.

According to the EIA, projected total liquid fuels consumption is expected to remain flat this year. Gasoline consumption remains largely unchanged as the recent strong growth in highway travel slows and continued improvements in vehicle economy boost overall fuel efficiency growth.

The EIA forecasts that motor gasoline consumption this summer driving season will remain largely unchanged from last summer’s average of 9 million barrels per day. The projected 0.7 percent increase in highway travel is offset by an increase in fleet-wide fuel efficiency. According to the EIA, fuel ethanol blending into gasoline is projected to decrease from 3,000 barrels per day from last summer’s level, reaching 870,000 barrels per day, representing 9.7 percent of total gasoline consumption.

The EIA’s weekly ethanol production data shows production averaged 922,000 barrels per day the week of March 28, up from 885,000 barrels per day the prior week. The most recent monthly export data indicates U.S. producers exported 2.054 million barrels of ethanol in January.