12-13 FB Ethanol glut

 After a disastrous couple of years brought on by high corn prices and low demand, the US corn ethanol business has emerged as a force in global energy markets.

The US pumps out a record 37m gallons of ethanol a day, easily surpassing rival Brazil’s sugar-based industry in output.

Producers are running out of places to put this ethanol. The US government mandates 12bn gallons in the fuel supply this year, but a decline in American driving and a 10 per cent cap on how much can be blended into motor fuel has created a glut.

“The domestic market here in the US is essentially saturated. We are looking for a home for the surplus,” says Geoff Cooper at the Renewable Fuels Association, a US trade group.

That home is increasingly abroad. US ethanol exports are more than double those of a year ago, totalling 251m gallons in the nine months through September. Let me get this straight. T Boone Pickens says the greatest transfer of wealth in history is from the U.S. to oil producing nations who often hide and help our mortal enemies. Does this make sense to anyone?