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Ethanol’s future could turn on regulatory issues

Potential future growth for corn-based ethanol is far above current production levels. That’s according to energy economist Robert Wisner.What is in doubt, however, is whether the industry can snap back from the idled plants, losses and bankruptcies. Wisner says ethanol’s future could be determined by whether the EPA raises the maximum blend rate to E-15; whether Underwriters Lab approves retail pumps that dispense a 15 percent blend; and whether California and EPA re-think their indirect land use calculations.

Wisner notes the 2007 Energy Act mandates the blend of 15-billion gallons of ethanol with gas in 2015, going to 35-billion gallons by 2022. But he says ethanol demand is limited by the E-10 limit for most cars and the small number of flex-fuel vehicles that use blends up to E-85.

If those limits stay in place, Wisner believes there may not be demand for more than the 10.36-billion gallons of fuel ethanol being produced this year, which will be hard on the industry.

(The NAFB News Service contributed to this article.)