EIA Petroleum Supply Monthly Data: For the latest month of actual data in July, ethanol production was 1.271 billion gallons with a monthly residual error of 13 mil gals. Refiner input was 1.201 bil gals and the calculated inclusion rate for the 11.926 bil gals of mogas receiving ethanol was 10.07%. About 96.9% of all mogas (with 12.302 bil gals) did indeed receive ethanol. Ethanol ending stock were 841 mil gals and fuel ethanol imports were 1.7 mil gals, while fuel and industrial ethanol exports were 77.4 mil gals.
EIA Short Term Energy Outlook Data: Using the September forecasts, the STEO is forecasting higher 2015 ethanol production at 14.63 bil gals & 2016 at 14.653 bil gals. The EIA is forecasting mogas production slightly lower at 139.919 bil gals in 2015 & 140.304 bil gals in 2016, while also slightly decreasing ethanol blending in 2015 to 13.825 bil gals & 2016 to 13.876 bil gals. Thus, implying ethanol net exports must increase in 2015 to 806 mil gals & 2016 to 777 mil gals (pg 4). EIA's WTI crude oil price forecast continues to come down and is $49/bbl in 2015 & $54/bbl in 2016 (pg 5). Their wholesale mogas forecast is projected to decline sharply and at a rate much faster than the ethanol futures market. If this happens, it will eliminate ethanol's discount to mogas by the end of 2015, not counting the portion of D6 RINs that isn't already priced into spot ethanol (pg 6).
DOC US Census Foreign Trade Data: Fuel and industrial ethanol exports increased in July and were 77.21 mil gals with Canada receiving 23.3, South Korea 11.27, Phillipines 8.72, India 8.49, China 7.56, Peru 6.35, and Brazil receiving 5.37 mil gals. For the first seven months of 2015, 515 mil gals of US ethanol have been exported. If this pace continues, 882 mil gals of fuel and industrial ethanol will be exported this year (pg 8). There was only a miniscule 512 gals of fuel ethanol imports in July, keeping the first seven months of 2015 at 17.1 mil gals (pg 9).
EIA vs DOC vs EPA Ethanol Exports & Imports: Comparing ethanol export data for 2015 YTD the EIA's PSM is reporting 515 mil gals exported through July, which is exactly what the DOC reported (pg 8). This should be the case because the PSM recieves its data from the DOC. Both the PSM and DOC export data is for fuel & industrial ethanol. The DOC actually breaks down the different types of exports and has denatured for fuel use exports for 2015 through July at 219 mil gals. This can be compared to EPA's 202 million D6 RIN exports for 2015 through August 10th, with 2015 through September 10th data at 227 mil D6 RIN exports. In the past, there has typically been a lag in EPA export data, but for 2015 it appears to be fairly in line with DOC denatured for fuel use data.
Looking at 2015 fuel ethanol imports, the EIA-814 monthly survey has 15.5 mil gals imported through July vs the DOC's 17.1 mil gals through July (pg 9). We can further compare this to EPA's 2015 importer generated 10.7 million D5 RINs through August 10th and 20.68 million through September 10th (assuming that only non-cellulosic fuel ethanol, most likely Brazilian sugarcane fuel ethanol, is being imported with D5 RINs, as has been the case the past two years). If we assume these rates of imports continue for the rest of the year, between 26 to 30 mil gals of fuel ethanol will likely be imported in 2015.
PRX Blue Sky Model: By the 2025-2026 crop year PRX is forecasting ethanol production to reach over 17.6 bil gals with exports doubling to over 1.8 bil gals (pg 10). If this happens, still only 0.7% of US ethanol will be in an estimated 256 bil gals of foreign mogas consumption in '25-'26. However, many countries are continuing to increase the amount of biofuels required to be blended into their fuel supplies, which can continue to increase US ethanol exports.
PRX is projecting that US motor gasoline consumption will slowly decline starting in 2017 due to increasing fuel efficiency standards. The National Highway Traffic Safety Adminstration and EPA are requiring passenger car and light truck manufactures to achieve 40.3-41.0 mpg for the combined average fleet-wide model year (MY) 2021 vehicles, increasing for MY 2025 to a proposed 48.7-49.7 mpg. These Corporate Average Fuel Economy (CAFE) regulations were enacted back in 1975 and currently require different standards for each manufacture based on their current fleet. If manufactures fail to meet their standards in a given year, they must use banked/acquired credits and/or pay a fine. However, it's important to note that CAFE mpg standards are, on average, 20-25% higher than label mpg values found on new car window stickers. Thus, it's estimated in reality that MY 2025 vehicles, on average, will get roughly 35.4 mpg.
One way of achieving greater engine efficiency is by taking advantage of the higher octane content in ethanol. At PRX we see E85/E15 use increasing by a factor of 10 to 1.75 bil gals in '25-'26. According to the Alternative Fuels Data Center, there are currently 2,678 E85 stations in the US. This number is continuing to grow, along with E15 pumps, as the USDA recently invested $100 million in blender pumps across 21 states.
USDA Grain Crushings and Co-products Production Data: For crop year 14-15 through July (less missing data for September) total corn use for ethanol production was 4.347 billion bushels (pg 14). If we trend this rate of use out a month and add an extra month for the missing data, PRX estimates corn to ethanol use at 5.216 billion bushels. USDA is estimating 5.205 billion bushels, while PRX's Blue Sky model is higher at 5.242 billion bushels.
