This is an excerpt from EERE Network News, a weekly electronic newsletter.

March 12, 2008

U.S. Ethanol Production Totaled 6.48 Billion Gallons in 2007

U.S. ethanol fuel production averaged 423,000 barrels per day in 2007, an increase of more than 34% over 2006 production, according to the Renewable Fuels Association (RFA). Ethanol fuel production totaled 6.48 billion gallons in 2007, far above the 4.7 billion gallons of renewable fuel required by the Energy Policy Act of 2005. Ethanol production will have to continue to increase this year, as the Energy Independence and Security Act of 2007 includes a new Renewable Fuel Standard that requires 8 billion gallons of renewable fuels to be blended into the country's fuel supply in 2008.

That's an annual growth rate of more than 23%, but the industry appears ready to meet that challenge. According to the RFA, there are currently 143 ethanol biorefineries with the combined capacity to produce 13.4 billion gallons per year of ethanol fuel, well above that required by the new standard. The industry is also building another 57 biorefineries and expanding seven existing biorefineries, an effort that will boost ethanol production capacity by another 5.2 billion gallons. And those capacity additions are yielding economic benefits, too, as a new report concludes that the ethanol fuel industry created nearly 240,000 new jobs in 2007 and added $47.6 billion to the nation's gross domestic product. See the press release (PDF 80 KB), the industry statistics, and the economic report (PDF 183 KB) on the RFA Web site, and for background on the Renewable Fuel Standard, see the article from the January 2 edition of this newsletter. Download Adobe Reader.

With U.S. gasoline consumption at about 9 million barrels per day, it's fair to ask how the U.S. fuel infrastructure will absorb a steadily increasing supply of ethanol. One answer is a greater use of flex-fuel vehicles, which can burn E85, a blend of 85% ethanol and 15% gasoline, but most cars are currently burning at most 10% ethanol blends, or E10. Fueling the entire nation with E10 would allow for a doubling of ethanol production from the 2007 production level, but the new fuel standard calls for ethanol consumption to more than double by 2012. The answer may come from Minnesota, which has found that current vehicles and fuel dispensing equipment can handle ethanol blends as high as 20%. The year-long research effort will lead the state and its partners to apply for a waiver from the U.S. Environmental Protection Agency to allow E20 to be used for all of the state's gasoline. If approved, such a change could nearly double the ethanol demand in Minnesota, a state where much of the nation's ethanol is produced, and could serve as a model for other states. See the RFA press release (PDF 178 KB).