First six months of 2017 sees continued growth in fuel ethanol production

According to the U.S. Energy Information Administration, U.S. weekly ethanol production averaged 1.02 million barrels per day (b/d) during the first six months of 2017.

This marks a 5 percent increase over the same period in 2016. U.S. ethanol production set a weekly record of 1.06 million b/d in the week of Jan. 27 and has averaged weekly production near or above 1 million b/d in almost every week in 2017. EIA reported in its most recent Short-Term Energy Outlook that if ethanol production maintains growth, 2017 will set a new record for annual fuel ethanol production.

A major factor that has helped contribute to production growth was the economic stability and increased harvest of corn, the primary feedstock of ethanol in the country. The U.S. Department of Agriculture estimates that the United States produced a record 15.1 billion bushels of corn in the 2016-2017 harvest year, which was 11 percent more than the 2015-2016 harvest year.

Used primarily as a blending component in the production of motor gasoline, ethanol’s demand increased as U.S. motor gasoline consumption grew in the past four years from 8.7 million b/d in 2012 to 9.3 million b/d in 2016. This demand resulted in the 7 percent increase of additional ethanol demand by way of E10 blending, the most common blend of motor gasoline.

U.S. ethanol plant capacity increased as well for the fourth consecutive year in 2017. Overall capacity reached approximately 15.5 billion gallons per year in January. EIA forecasts that capacity will hit 1.02 million b/d in 2017, translating to 15.8 billion gallons per year.

EIA reports that ethanol exports have also been on the rise, particularly through the first four months of 2017. U.S. gross ethanol exports averaged 96,000 b/d, a 40 percent higher figure than was seen during the same period the year before. Net exports are forecasted to reach 80,000 b/d in 2017, most likely surpassing the previous record of 70,000 b/d set in 2011.