Seeking Alpha

Ethanol export plans cramped by distribution network geared to U.S. market

  • Archer Daniels Midland (ADM), Green Plains Renewable (GPRE) and other U.S. ethanol makers are banking on export markets as they deal with Obama administration plans to cut U.S. consumption requirements, but the industry is held back by a distribution structure built almost exclusively around the domestic market, according to a WSJ analysis.
  • The bulk of U.S. ethanol plants are located in the Midwest to be close to the corn supply rather than near shipping ports, which is driving up costs to transport the fuel.
  • Also, shipments to the EU have all but ended since the EU last year imposed a tariff on U.S. ethanol, and the U.S. faces stiff competition from Brazil.
Comments (5)
  • 11146471
    , contributor
    Comments (1146) | Send Message
     
    Disaster.

     

    US government backs oil and gas cartels instead of farmers and renewables.

     

    In Europe (mainly Germany) and Latin America (mainly Brazil) it's a different deal!
    28 Jan 2014, 01:57 PM Reply Like
  • Randal James
    , contributor
    Comments (3365) | Send Message
     
    Farmers should be farmers - not pawns in a foolishly subsidized faux-energy business. Ethanol from cane is reasonable given the much higher yield. Ethanol from corn is simply another $400 toilet seat.
    28 Jan 2014, 03:09 PM Reply Like
  • 11146471
    , contributor
    Comments (1146) | Send Message
     
    Farming is an ancient human activity and helps to keep the rural population in healthy economic condition.
    The land and the seeds will always be there even when the fossil fuels would have been depleted.
    And its always wise to have a back-up plan just in case of disruption in global oil flows due to wars or embargoes or spike in prices. At least you have a better bargaining position against OPEC.
    A 5% or 10% ethanol mix is not going to harm us oil production, but it can help us countryside's prosperity.
    28 Jan 2014, 04:05 PM Reply Like
  • Randal James
    , contributor
    Comments (3365) | Send Message
     
    The cost of the ethanol fantasy has been in tens of billions of annual direct subsidies and billions more in related increases in costs for higher consumer prices for other consumer food staples such as bread, meat and dairy. Hoo boy! Did we stick it to OPEC or what?
    I cannot immediately think of another program so misguided and wasteful nor any that has harmed consumers more. We live in a world short of food and we want to turn our surplus into... gasoline? If we loved ethanol so much we could've bought all we wanted from the Brazilians and the Cubans and made their economies much more robust.
    Instead, we pillage our own soil and its nutrients for something that doesn't pencil out economically, doesn't burn as efficiently as the real thing, shortens engine life, and costs us all real money at the grocer's. Brilliant!

     

    http://bit.ly/1e57ScF
    28 Jan 2014, 04:24 PM Reply Like
  • T. A. "Ike" Kiefer
    , contributor
    Comments (133) | Send Message
     
    Ethanol is following a classic Hubbert curve -- which is very educational about the real dynamics of Hubbert curves considering ethanol is not a finite resource. US peak ethanol happened in 2011. This curve is being shaped by demand, not by supply, and represents a shrinking market share. US soy biodiesel is just peaking this year. My weather gauge says sentiment is souring on RFS and biofuels are going to be asked to carry more of their own load with less subsidy. Farmers can already see it as well and are starting to back out of corn. The RFS 2014 public comment window closed tonight. I expect EPA's downward revision will stick, and some politicians will begin to seriously discuss rolling back corn ethanol altogether. Wild ride ahead -- mostly downhill.
    29 Jan 2014, 01:30 AM Reply Like
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