FEW panelist joins discussion via live feed from Mexico
Source: By Lisa Gibson, Ethanol Producer Magazine • Posted: Wednesday, June 21, 2017
“For the first time, we are going to be sending E10 to the country of Mexico, where they’re consuming 12 billion gallons of gasoline each year,” Moore told the crowd from a large screen above the stage.
Mexico’s methyl tert-butyl ether industry perpetuated ethanol myths and successfully kept a cap on its cleaner competition, she said. “We’ve spent the last year educating anyone who would listen on the benefits of ethanol. … Finally, change is coming to allow ethanol into this country.”
U.S. ethanol is about 6 cents per gallon cheaper than Mexico gasoline, and allowing U.S. ethanol also alleviates Mexico’s susceptibility to supply delays. The country keeps only a three-day supply on-hand, Moore said.
It’s a $1.2 billion new market for ethanol, Moore said before signing off to get back to work.
Canada, China and Brazil
Back on site, the general session panel switched its focus to Canada’s market, as Jim Grey, CEO of IGPC Ethanol Inc., talked about policy developments in clean fuel and climate change. “They have recently announced a proposed clean fuel standard. We don’t know what the clean fuel standard is going to look like yet. But that is going to change the landscape. … The world is changing for us quickly in Canada.”
IGPC is undergoing an expansion from 50 million to 100 million gallons, prompted by market indicators and proximity to Toronto, which Grey called an epicenter of ethanol consumption. “I have a freight advantage going to the Toronto market,” he said. In addition, the green electricity used to power the company’s process will be advantageous when the clean fuel standard is implemented, he said. “Our product is likely to be preferred.”
Canada is one of many countries that imports ethanol from the U.S. Overall, that export pace will slow, said Geoff Cooper, senior vice president of the Renewable Fuels Association, adding that about 1.2 billion gallons are likely to be exported in 2017.
China emerged “out of the woodwork” last year as a huge market, Cooper said, citing the 100 million gallons the U.S. exported there. “We’re increasingly seeing ethanol blending as a solution for them.” But as of Jan. 1, China’s tariffs on ethanol were raised by 30 to 40 percent. “That’s just too big of a hurdle to get into that market today.” Nobody has the crystal ball on cracking that market back open, he said. “China has been a big disappointment so far this year.”
The ethanol market is robust, however, in Brazil, the second-largest producer and second-leading consumer of ethanol in the world, behind the U.S. Brazil has been the U.S.’s largest export market since last year, as sugarcane prices have risen and millers have switched focus to table sugar production, Cooper said.
Domestic demand
Not surprisingly, the domestic demand general session panel centered on RVP. Brian Jennings, executive vice president of the American Coalition for Ethanol, said the current legislative effort is enormous and displays incredible teamwork.
The push to convince legislators is crucial. “We’ve really got to run the table to get remaining senators to come to our side on this,” he said.
“I don’t want to overpromise what we can get done. We’re as far as we’ve ever been. But it’s an extremely heavy lift to get beyond this point.”
Emily Skor, CEO of Growth Energy, said two messages will be the focus when encouraging votes: retailer choice and the environmental benefits of ethanol.
“This issue isn’t about ethanol,” she said. “It’s about choice; it’s about consumers.” Jennings agreed and said, “This is about retailers having the ability to offer their customers what they want to offer them. … Retailers are by far the most persuasive messengers we have here.”
E15 is selling well with consumers when it’s available, Skor said, citing figures from retailer Minnoco in the Twin Cities area: 60 percent of sales are ethanol. That figure plummets to 5 percent in the RVP months.
“When the consumers have the option of E15, they’re reaching for it time and again.”
Both Skor and Jennings encouraged attendees to reach out to their senators and encourage them to vote in favor of an E15 RVP waiver.
Retailers sit on the sidelines because it’s a pain to change the pumps, Skor said, adding that, with the waiver, those retailers will join the market, and current E15 retailers will expand their offerings. An expansion of current offerings adds 1 billion gallons in ethanol demand, Skor said. “And they’ve been clear: RVP is the biggest obstacle they see in their way right now.”