U.S. Ethanol Enters Global Market

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"Is this year an anomaly, or the beginning of export expansion?"

With ethanol exports booming in 2010, the question remains whether the year is an anomaly or the beginning of export expansion. In the first seven months of the year, 182.7 million gallons of U.S. ethanol was shipped to other countries. Only one year in the past two decades, 1995, has seen more ethanol—197.5 million gallons—exported than the amount exported so far this year. "We're expecting that we could export in excess of 300 million gallons this year," says Geoff Cooper, who tracks exports for the Renewable Fuels Association as its vice president of research and analysis.

Although the numbers are notably higher this year, the U.S. industry has been exporting its product for years, Cooper says. The difference this year is the saturation of the U.S. domestic market. "There's really nowhere else to go with ethanol in the U.S. markets, so the natural progression of things is to start developing foreign markets," he says.

Exports tracked by the Foreign Agricultural Service, Global Agricultural Trade System, include denatured and non-denatured, non-beverage ethanol traditionally used for industrial purposes, although it can be used for fuel. "Our industry is exporting product and there's international demand for ethanol," Cooper says, "whether it's for fuel, which most of it is, or whether it's for some other industrial purpose."

In another way, increased exports have been a mixed blessing, Cooper adds. U.S. producers are now exporting a homegrown, renewable fuel—and the benefits associated with that—to other countries. "One of the founding principles of the industry was, let's do what we can to increase our domestic fuel supply and reduce the amount of oil that we import," he says. "So here we are now in a situation where the U.S. ethanol industry is standing at the ready to produce more ethanol and to assist in reducing the amount of foreign oil that we need, and yet the industry is being held back because of the limit on E10." The situation underscores the need for immediate approval of E15, he adds.

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