Good potential for US ethanol 'if things play out right'
6/07/2009 9:44:00 PM
THE potential future growth of the US corn-starch ethanol industry is at
least 45pc higher than the current production levels.

That’s according to US Energy Economist Robert Wisner. But can the
industry snap back from the current wave of idled plants, losses and

He says three questions raise doubts and the answers could determine the
future for today’s corn-based ethanol plants and tomorrow’s cellulosic

Those questions are:

• Will the US Environment Protection Agency (EPA) raise the maximum
blend rate to E-15, up from the current 10pc blend?

• Will the US Underwriters Laboratory, which endorses the type of retail
pumps, approve the use of retail pumps with a 15pc blend?

• Will California and the EPA re-think their indirect land use calculations?

Wisner notes the 2007 Energy Independence and Security Act mandates the
blend of 15 billion gallons of ethanol with gas in 2015.

That goes even higher, to 35 billion gallons by 2022.

But he says ethanol demand is limited by the E-10 limit for most cars
and by the small number of US flex-fuel vehicles capable of using blends
up to E-85, compared with the higher proportion of flex-fuel cars in
Brazil capable of running on E-85.

Wisner believes there may not be demand for more than the 10.36-billion
gallons of fuel ethanol being produced this year, if these current E-10
limits stay in place.

This could cause the hard times for the ethanol industry to continue.

***Could it also cause price rises for agrifoods by the take up of
available arable land used for consumer foods ?