Biodiesel production down; ethanol still at record surplus
Source: Dan Piller, Des Moines Register • Posted: Thursday, March 22, 2012
Western Iowa plant at Wall Lake restarted in 2011 after biodiesel mandate went into effect
Biodiesel production has dropped from its record levels of late-2011 after the renewable fuel’s $1 per gallon tax credit expired on Jan. 1. But ethanol production continues at record levels.
The U.S. biodiesel industry produced 135 million gallons of fuel in the first two months of 2012, according to new numbers released by the EPA Wednesday.
The recent volume is ahead of the 80 million gallons produced in the same two months of 2011, but down from the record production late last year when the industry exceeded 100 million gallons per month for five consecutive months and reached a peak of 160 million gallons in December.
In 2011 biodiesel enjoyed a resurgence after congress not only reinstated the tax credit but also began a mandate of 800 million gallons to be used last year, expanded to 1 billion gallons in 2012.
Anne Steckel, vice president of federal affairs for the National Biodiesel Board, said the drop-off reflects lost momentum this year after Congress allowed the biodiesel tax incentive to expire and the Obama Administration delayed finalizing next year’s biodiesel volume requirement under the Renewable Fuel Standard.
“These are solid numbers that show the biodiesel industry is on pace to meet the 1 billion gallon RFS requirement this year, but they also reflect some of the missed opportunities for growth and jobs that we’ve seen with the loss of the tax credit and the continued uncertainty about next year’s RFS volume,” Steckel said. “With the tax credit and clear RFS growth in place, we think these numbers would be better.”
Last year, the biodiesel industry produced a record of nearly 1.1 billion gallons, supporting more than 39,000 jobs across the country and helping to reduce U.S. dependence on skyrocketing global petroleum prices.
Iowa has 14 working biodiesel plants.
Meanwhile the weekly survey by the U.S. Department of Energy shows ethanol stocks still at a record 22.7 million barrels through March 16, about 700,000 barrels above the level of a week earlier and 2.7 million barrels above the 20 million barrels a year ago the same week.
Wholesale ethanol prices have dropped from $2.75 per gallon in late 2011 as refiners and blenders took advantages of the final days of the 45-cents per gallon tax credit to $2.28 per gallon Wednesday on the Chicago Board of Trade.
The drop in prices, along with continued high corn prices have driven ethanol production into the red. Figures from Iowa State University show that in January and February, ethanol plants averaged an operating loss of 11 cents per gallon in January and 16 cents per gallon in February.
That red ink came after profits averaging 42 cents per gallon in October, 68 cents per gallon in November and 16 cents per gallon in December.
Western Iowa plant at Wall Lake restarted in 2011 after biodiesel mandate went into effect
Biodiesel production has dropped from its record levels of late-2011 after the renewable fuel’s $1 per gallon tax credit expired on Jan. 1. But ethanol production continues at record levels.
The U.S. biodiesel industry produced 135 million gallons of fuel in the first two months of 2012, according to new numbers released by the EPA Wednesday.
The recent volume is ahead of the 80 million gallons produced in the same two months of 2011, but down from the record production late last year when the industry exceeded 100 million gallons per month for five consecutive months and reached a peak of 160 million gallons in December.
In 2011 biodiesel enjoyed a resurgence after congress not only reinstated the tax credit but also began a mandate of 800 million gallons to be used last year, expanded to 1 billion gallons in 2012.
Anne Steckel, vice president of federal affairs for the National Biodiesel Board, said the drop-off reflects lost momentum this year after Congress allowed the biodiesel tax incentive to expire and the Obama Administration delayed finalizing next year’s biodiesel volume requirement under the Renewable Fuel Standard.
“These are solid numbers that show the biodiesel industry is on pace to meet the 1 billion gallon RFS requirement this year, but they also reflect some of the missed opportunities for growth and jobs that we’ve seen with the loss of the tax credit and the continued uncertainty about next year’s RFS volume,” Steckel said. “With the tax credit and clear RFS growth in place, we think these numbers would be better.”
Last year, the biodiesel industry produced a record of nearly 1.1 billion gallons, supporting more than 39,000 jobs across the country and helping to reduce U.S. dependence on skyrocketing global petroleum prices.
Iowa has 14 working biodiesel plants.
Meanwhile the weekly survey by the U.S. Department of Energy shows ethanol stocks still at a record 22.7 million barrels through March 16, about 700,000 barrels above the level of a week earlier and 2.7 million barrels above the 20 million barrels a year ago the same week.
Wholesale ethanol prices have dropped from $2.75 per gallon in late 2011 as refiners and blenders took advantages of the final days of the 45-cents per gallon tax credit to $2.28 per gallon Wednesday on the Chicago Board of Trade.
The drop in prices, along with continued high corn prices have driven ethanol production into the red. Figures from Iowa State University show that in January and February, ethanol plants averaged an operating loss of 11 cents per gallon in January and 16 cents per gallon in February.
That red ink came after profits averaging 42 cents per gallon in October, 68 cents per gallon in November and 16 cents per gallon in December.