Depressed ethanol consumption to last through 2021

U.S. gasoline consumption will be 11% lower this year than in 2019 due to the coronavirus pandemic and the accompanying economic slowdown, said an Energy Department agency in a monthly report. Ethanol use will experience a similar decline, according to the Short-Term Energy Outlook.

“Reduced economic activity related to the COVID-19 pandemic has caused significant changes in energy supply and demand patterns,” said the report, issued by the Energy Information Administration. “EIA forecasts significant decreases in U.S. liquid fuels demand during the first half of 2020 as a result of COVID-19 travel restrictions and disruptions to business and economic activity. EIA expects the largest impacts will occur in the second quarter of 2020 before gradually dissipating over the next 18 months.”

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The EIA said ethanol consumption would fall to 29 million gallons a day during the three-month period of April, May, and June. It was 40.3 million gallons a day in the closing months of 2019. Consumption would rise to an average of 37 million gallons a day in October, November, and December, estimated the EIA. For most of 2021, it said, ethanol consumption would average 38.3 million gallons a day.

The Renewable Fuels Association said ethanol production averaged 25.9 million gallons a day in the week ending May 8, the highest level in five weeks. “However, production remains tempered due to COVID-19 disruptions, coming in 41.3% below the same week in 2019.” Based on production over the past four weeks, the industry would produce 8.88 billion gallons this year. It has the capacity to produce 17.6 billion gallons annually.

Produced with FERN, non-profit reporting on food, agriculture, and environmental health.
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