EIA: Ethanol production to average 1.02M barrels per day in 2022

By Erin Voegele | January 14, 2021

The U.S. Energy Information Administration on Jan. 12 released is Short-Term Energy Outlook for January, which features the agency’s first short-term predictions for 2022. The EIA currently predicts ethanol production will average 1.02 million barrels per day next year, up from 980,000 barrels per day in 2021. Production averaged 900,000 barrels per day last year.

In the STEO, the EIA explains that sharp reductions in gasoline demand resulting from the COVID-19 pandemic caused U.S. ethanol production to fall significantly in 2020, decreasing by an estimated 12 percent when compared to 2019.

As a result of the pandemic, the EIA predicts that persistent reductions in domestic gasoline demand and limited higher-blend ethanol growth potential will result in ethanol production remaining lower than 2019 levels through 2022.

The EIA estimates that ethanol consumption averaged 824,000 barrels per day in 2020, down 13 percent from 949,000 barrels per day in 2019. The agency currently predicts ethanol consumption will gradually rise through 2022, largely following the recovery in domestic motor gasoline consumption with limited higher growth in any higher blend blending levels. Ethanol consumption is currently expected to average 887,000 barrels per day in 2021 and 917,000 barrels per day in 2022. The percentage of ethanol in total gasoline consumption averaged 10.2 percent in 2019 and 2020. The total blend level is expected to remain near that level in 2021 and 2022. The EIA said that stable ethanol share assumes that growth in higher-level ethanol blends is limited by a combination of lower gasoline prices reducing incentives for increased ethanol blending and limited consumer demand for higher levels of ethanol blending beyond E10.