Growing Export Market Makes Ethanol Big Business in U.S.

Researched by Industrial Info Resources (Sugar Land, Texas)--With strong domestic production, fuel ethanol exports from the U.S. hit a record high in 2018, increasing nearly 25%, from 91,000 barrels per day (BBL/d) in 2017 to 112,000 BBL/d in 2018, according to the U.S. Energy Information Administration (EIA). In the U.S., ethanol lobbying groups such as the Renewables Fuels Association (Washington, D.C.) and petroleum refiners continue to debate over the more widespread use of E15-blended gasoline (15% ethanol) versus the now standard E10 (10% blend) in the U.S. However, with export locations such as Brazil and Canada increasing their receipts of U.S. ethanol, ethanol production remains a big business in the U.S. Industrial Info is tracking billions of dollars' worth of ethanol-related projects in the U.S., mostly in the Midwest and West Coast regions.

Click on the image at right for a graphic from the EIA showing U.S. ethanol export destinations by location from 2010 through 2018.

Among the ethanol projects being tracked by Industrial Info specifically geared toward exports is Magellan Midstream Partners LP (NYSE:MMP) (Tulsa, Oklahoma) and Valero Energy Corporation's (NYSE:VLO) (San Antonio, Texas) marine storage terminal along the Houston Ship Channel in Pasadena, Texas, to export ethanol and petroleum products. Valero is one of the largest refiners in the U.S. with substantial ethanol-production capability. The first phase of construction was begun in 2016, and Phase II construction, which will increase storage capacity to 4 million barrels, began earlier this year. Phase II is expected to be completed by the end of the year. For more information, see Industrial Info's project report.

While most of the ethanol manufactured in the U.S. comes from corn feedstock, one of the largest ethanol projects being tracked in the U.S. is Enerkem Incorporated's (Montreal, Quebec) plan to manufacture ethanol from municipal solid waste (MSW). The 200,000-square-foot building in Rosemount, Minnesota, would process 400,000 tons per year of MSW to produce 20 million to 40 million gallons per year of ethanol. Construction could kick off early next year, for completion in the second half of 2021. For more information, see Industrial Info's project report.

Among the largest ethanol projects currently under construction is a joint venture project of ICM Incorporated (Colwich, Kansas) and The Andersons Incorporated (Maumee, Ohio) for an ethanol biorefinery next to ICM's headquarters in Colwich. Construction of the plant started early last year and is expected to wrap up in fourth-quarter 2019. The facility will use second-generation production technology to produce 70 million gallons of fuel ethanol from biomass feedstocks. For more information, see Industrial Info's project report.

Indiana is a top U.S. destination for ethanol projects, and in Shelbyville, POET LLC (Sioux Falls, South Dakota) is constructing an 80 million-gallon-per-year ethanol plant, which will use corn feedstock. Construction began late last year and is expected to wrap up in the first half of next year. For more information, see Industrial Info's project report.

In California, Aemetis Incorporated (Cupertino, California) plans to this year kick construction on a two-phase project to construct an ethanol plant at a former munitions facility in Riverbank. The first phase will establish 12 million gallons per year of production, and Phase II will increase production to 32 million gallons per year. The facility will manufacture ethanol from biomass waste, such as agricultural, forest, dairy and construction waste. The project is expected to take a little more than a year to complete. For more information, see Industrial Info's project report.

In Onida, South Dakota, Ringneck Energy LLC is wrapping up construction on an ethanol plant that will use 25 million bushels per year of corn to produce 80 million gallons per year of ethanol, 212,000 tons per year of distillers dried grains (commonly used in livestock feed) and 12.5 million pounds per year of corn oil. Construction began in late 2017 and is expected to be completed soon. Fagen Incorporated (Granite Falls, Minnesota) is providing engineering, procurement and construction. For more information, see Industrial Info's project report.

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