As demand for ethanol has
increased, the number of ethanol plants in the U.S. has quadrupled since 1999.
A USDA report says the growth in the number of ethanol plants has been driven
by the Renewable Fuels Standard, which was first enacted in 2005. The initial
increase in plant numbers after 2005 led to some plants not producing at their
full potential because supply grew faster than demand. However, since 2011, the
number of plants has remained steady, allowing production numbers to increase
as plants utilize their maximum production capacity. As of last year, the USDA
report says plants have been operating at 97 percent capacity. That translates
into more than 15 billion gallons of ethanol production. Such a high number
would normally mean demand for more new plants. However, the limitation on the
amount of ethanol that can be blended with gasoline in existing vehicles is
basically 10 percent. When you add in lower gasoline consumption because of
greater vehicle efficiency and fewer miles driven, domestic demand for ethanol
is further limited in expansion ability. Thanks to these limitations,
additional domestic production is intended for export markets.
Welcome
