August 10

AUGUST 10, 2018: Ethanol "Demand Destruction": Really Happening or Just Hype?

The ethanol lobby has been claiming that low RINs costs and small refinery waivers are creating “demand destruction,” meaning decreased U.S. ethanol production.  That would be concerning for America’s farmers—if it were true.  However, the data continues to cast doubt on the claim. 

Here is what several independent voices are saying about the state of U.S. ethanol so far in 2018. 


The Andersons, Inc.

August 8, 2018: Q2 2018 Results Earnings Call

Small-refinery exemptions and weak RIN prices “have not yet had a significant impact on domestic blending due to high gasoline prices and low corn ethanol prices.”

–Pat Bowe, President and Chief Executive Officer, The Andersons, Inc.


U.S. Energy Information Administration

August 7, 2018: “August Short-Term Energy Outlook”

The EIA raises its 2018 estimate for U.S. fuel ethanol consumption to 946,000 b/d from the 942,000 b/d the agency had forecast the previous month. EIA also raises its 2019 consumption outlook to 953,000 b/d from the 952,000 b/d contained in the prior month's report.

August 1, 2018: “U.S. fuel ethanol production capacity continues to increase”

“Fuel ethanol production capacity in the United States reached more than 16 billion gallons per year, or 1.06 million barrels per day (b/d), at the beginning of 2018, according to EIA's most recent U.S. Fuel Ethanol Plant Production Capacity report. Total listed, or nameplate capacity, of operable ethanol plants increased by 5%—more than 700 million gallons per year—between January 2017 and January 2018.”


Green Plains Inc.

August 1, 2018: Q2 2018 Results Earnings Call

Green Plains produced 296 million gallons of ethanol in the second quarter versus 275 million gallons for the same period in 2017. That was 80% of our operating capacity for the quarter. Ethanol production ran slower in the second quarter which is now going to be a thing of the past.”

–Todd Becker, President and CEO, Green Plains Inc.


Archer Daniels Midland Co.

July 31, 2018: Q2 2018 Results Earnings Call

“What’s interesting is on the demand side for domestic ethanol, we’re going to have some marginal improvements just due to the fact that gasoline consumption will go up a little bit.  U.S. economy is strong.  So you’re going to see some marginal growth in domestic demand.”

–Ray Young, Executive Vice President and CFO, Archer Daniels Midland Company


U.S. House Energy and Commerce Subcommittee on the Environment

July 25, 2018: Oversight Hearing on “Examining Renewable Identification Numbers under the Renewable Fuel Standard”

“Currently, the low RIN prices are the result of record domestic ethanol production and consumption, and this abnormally high RIN bank.”

–Corey Lavinsky, Director of Global Biofuels, S&P Global Platts

“The small refiner waivers are granted retrospectively, so the compliance year has already passed, but every refiner assumes they’re going to be an obligated party during that year. They will continue to blend renewable fuels and buy RINs as needed because they don’t know that they’re going to get the exemption at the twelfth hour when they go to report to the EPA by March 31st of the following year…

“Does it destruct the demand of the current year?  If you look at the RIN data through June, we’re at the same production level that we were in 2017 and we’re halfway towards meeting the 2018 compliance RVOs.

Sandra Dunphy, Director, Energy Compliance Services, Weaver and Tidwell, L.L.P.