Ethanol Unfairly Blamed for High Gas Prices
Ethanol plants in Nebraska have been struggling with too much product on hand as flooding has made it too difficult to move. Troy Bredenkamp is Executive Director of Renewable Fuels Nebraska. He says the biggest problem for the state’s ethanol plants is a lack of rail service due to the flooding.
“We had quite a few plants, up to five, knocked offline. A couple of those had direct flooding impacts, but most of them were indirect due to just a lack of rail service. We had significant portions of our rail infrastructure damaged due to the flood waters.
Bredenkamp says a slowdown in ethanol shipments is unfairly being blamed for rising gas prices around the nation.
“I’ve seen several articles that due to the flooding and lack of ethanol, that’s the reason why there’s $4 gas in California. I would argue ethanol futures are dropping by the day as production comes back online, so we’re down to almost at a break even again. We’re sitting on more ethanol than we know what to do with. Shipments are picking up to the coast, and while there has been a bump, I think I was told it’s probably about a $0.50 per gallon of ethanol bump to get that to California right now, put that over an E10 blend perspective, that’s $0.05/gallon.”
Bredenkamp says as they find more rail cars to help, it shouldn’t take a long time to get through the backlog of ethanol in storage.
In other ethanol related news, the year-round sale of E15 remains a hot topic in DC. The EPA is accepting comments now on the rule that would allow year-round sales. Indiana Corn Growers Association President Sarah Delbecq recently testified in favor of the rule during a public hearing in Michigan. The EPA hopes to have the rule in place by June 1, the beginning of the summer driving period.
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