Tight margins hurting ethanol production in Nebraska

Source: BY Chabella Guzman, KTIC • Posted: Wednesday, January 9, 2019

Ethanol in 2018 started out on a good foot, but faltered early in the year and has been unable to regain its footing.

Then, the day after the new year, Pacific Ethanol based in Sacramento, Calif. announced it would likely halt production in its western ethanol plant in Aurora, Neb.

While signs pointed to some positives with the EPA and exports, Troy Bredenkamp, executive director of Renewable Fuels Nebraska says negative margins in ethanol is something they are seeing across the U.S.

“Ethanol prices are historically low,” he said. “So, I think plants are assessing on a plant by plant basis what makes sense to them and if they are losing money on every gallon produced, idling could be an option for them.”

Early in 2018 ethanol also saw really good export numbers, especially with China. All of which stopped, once the trade tariffs were put in place.

“We saw the China market dry up completely, we haven’t exported a drop of ethanol to China in the last three-quarters of 2018,” Bredenkamp said.

The small refinery waivers are also beginning to have an impact on the ethanol industry granted by the EPA in 2017-18.

Along with the waivers Bredenkamp said, now the government shutdown will also have an effect on the EPA granting year round E15 in time for summer driving on June 1.

“We really need to see some good news come out of Washington, rather than what has transpired over the last year to 18 months.”