US ethanol production falls for the first time in 16 years
December 26, 2012, 11:29 am
American consumers prefer choices when shopping, and that holds true when it comes to fuel.
More pilots appear to be turning to mogas, a lead-free and less expensive alternative to ethanol, according to General Aviation News. Although the number of airports offering the fuel type remains relatively low, it has increased, the source reported.
A recent report by Bloomberg indicated that ethanol sales are expected to fall on a year-over-year basis for the first time in 16 years.
Energy Department data shows that ethanol output has fallen 14 percent in 2012 to 827,000 barrels a day, 500 million gallons short of federal mandate requirements put in place in 2007, according to Bloomberg. Much of this decrease was due to the drought experienced this past summer. Ethanol is produced by fermenting starches from corn, a crop that was signicantly affected by the lack of rainfall this year.
According to the source, ethanol producers are losing nearly 36 cents for each gallon of biofuel made. This time last year they were earning nearly 24 cents per gallon.
“Right now, it is the toughest time ever to run an ethanol plant,” Bruce Babcock, an energy and farm economist at Iowa State University in Ames, told the news source. “It’s never been this bad in the last four years.”
According to an article last month from the Wall Street Journal, the International Energy Agency predicts the United States will overtake Saudi Arabia as the leading oil producer.
"By around 2020, the United States is projected to become the largest global oil producer [and to overtake Saudi Arabia for a time]", read the report by the IEA. "The result is a continued fall in U.S. oil imports [currently at 20 percent of its needs] to the extent that North America becomes a net oil exporter around 2030."
The IEA predicts that in the next 10 years, U.S. oil imports will be cut in half to 4 million gallons a day. The production of fuel shifting to the United States would appear to be good news for the aviation community, but this is a misconception. Avgas, currently used in planes, is extracted from Saudi Arabia because it is high-grade. The fuel that would come from the shale fields in the United States is low grade, so it's not usable when making Avgas.
With much of aviation's future relying on gas prices, pilots should ensure their own finances are in order by obtaining pilot life insurance.
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