EIA slightly increases 2017 ethanol production forecast

By Erin Voegele | December 08, 2016

The U.S. Energy Information Administration has released the December edition of its Short-Term Energy Outlook, predicting fuel ethanol production will average 990,000 barrels per day in 2016, increasing to 1 million barrels per day in 2017. Ethanol production averaged 970,000 barrels per day in 2015.

In its November STEO, the EIA predicted U.S. ethanol production would average 990,000 barrels per day in both 2016 and 2017. 

On a quarterly basis, the EIA predicts fourth quarter 2016 ethanol production will average 1 million barrels per day, down from 1.01 barrels per day during the third quarter. Moving into 2017, ethanol production is expected to average 1 million barrels per day during the first three quarters of the year, increasing to 1.01 million barrels per day during the fourth quarter.

Within the STEO, the EIA indicates its December STEO forecasts take into account the U.S. EPA’s recent rule finalizing 2017 renewable fuel standard (RFS) volume requirements. The administration said it expects the largest effect of the finalized 2017 RFS targets will be on biomass-based diesel consumption, including biodiesel and renewable diesel.

Biodiesel production averaged 82,000 barrels per day in 2015 and is forecast to average 99,000 barrels per day this year. In 2017, biodiesel production is expected to increase to an average of 104,000 barrels per day. Net imports of biomass-based diesel are also expected to increase, from 31,000 barrels per day in 2015, to 45,000 barrels per day in 2016 and 51,000 barrels per day in 2017.

According to the EIA, projected ethanol consumption is expected to average approximately 940,000 barrels per day in both 2016 and 2017, resulting in the ethanol share of the total gasoline pool averaging 10 percent in both years.

The December STEO notes that U.S. average regular gasoline prices in averaged $2.18 per gallon in November, down 7 cents per gallon when compared to October. The EIA said it expects gasoline prices to fall to an average of $2.10 per gallon in January. Overall, retail gasoline prices are expected to average $2.14 per gallon in 2016, increasing to $2.30 per gallon in 2017.

The EIA’s most recent weekly ethanol production data shows U.S. ethanol production averaged 1.023 million barrels per day the week ending, Dec. 2, up from 1.012 million barrels per day the previous week.

The EIA’s most recently monthly data shows the U.S. imported 31,000 barrels of ethanol in September, all from Brazil. During the same month, the U.S. exported 2.373 million barrels of ethanol, with Canada, Brazil and China the top destinations.