EIA predicts increased ethanol consumption in short-term outlook

By Erin Voegele | July 07, 2015

The U.S. Energy Information Administration has issued the July edition of its Short-Term Energy Outlook, predicting ethanol production, which averaged 935,000 barrels per day last year, will remain near current levels in 2015 and 2016. A similar prediction was made in the June STEO.

According to the EIA, ethanol consumption averaged 878,000 barrels per day last year and is expected to increase to 894,000 barrels per day this year and 902,000 barrels per day next year. At the forecasted consumption level, the EIA indicates ethanol would average 9.9 percent of the total gasoline pool in 2015 and 2016.

The STEO notes EIA does not expect measurable increases in E15 or E85 during the forecast period. The administration also said the proposed renewable fuel standard (RFS) targets are expected to encourage imports of Brazilian sugarcane ethanol, which averaged 3,000 barrels per day last year. Due to the expected increase in ethanol gross imports, the EIA predicts net exports of ethanol will fall from 51,000 barrels per day last year, to 44,000 barrels per day this year and 36,000 barrels per day in 2016.

Biodiesel production averaged 81,000 barrels per day last year and is forecast to average 91,000 barrels per day this year and 98,000 barrels per day next year. Net imports of biomass-based diesel are expected to increase from 16,000 barrels per day last year to 24,000 barrels per day this year and 35,000 barrels per day in 2016. The EIA said it expects a combination of higher biomass-based diesel consumption, higher consumption of domestic and imported ethanol, and banked renewable identification numbers (RINs) will help meet the newly proposed RFS volumes through 2016.

The EIA’s most recently weekly ethanol production data shows production averaged 968,000 barrels per day the week of June 26, down from a record-setting level of 994,000 barrels per day reported for the week of June 19.

The U.S. exported 1.786 million barrels of fuel ethanol in April, down from nearly 2 million barrels in March. Canada and Brazil were the top destinations for U.S. ethanol exports in April. Ethanol was also exported to Chile, Colombia, India, Jamaica, South Korea, Mexico, Netherlands, Panama, Philippines, Puerto Rico, Singapore, Tunisia, United Kingdom, and U.S. Virgin Islands during the month.

According to the U.S. EIA, the U.S. imported only 257,000 barrels of fuel ethanol in April, with 250,000 barrels of that volume imported from Brazil and 7,000 barrels imported from Canada.