Studies find ethanol demand doing fine

Source: By Kelsey Tamborrino, Politico • Posted: Tuesday, September 18, 2018

Two studies out last week showed low costs have kept ethanol in the fuel system, even as EPA has expanded refinery waivers that ethanol producers have said are undermining the Renewable Fuel Standard. University of Illinois economist Scott Irwin found that ethanol blend rates hadn’t budged when accounting for seasonal changes in consumption, Eric reports, while refining giant Valero released a separate study prepared by Charles River Associates that came to a similar conclusion, arguing that as long as the price of Renewable Identification Number stayed above a certain level, fuel would be blended at the usual rates.

In response to the Irwin report, Renewable Fuels Association Executive Vice President Geoff Cooper — the incoming CEO of the group — said the “economic incentive to expand blending that was previously shouldered by the RIN must now be shouldered primarily by the ethanol-gasoline spread. This results in artificially low ethanol prices and highly compressed margins — also known as ‘economic harm’ — for ethanol producers.”