By Russell Blinch
WASHINGTON (Reuters) - Talk of a glut in the U.S. ethanol market should be a thing of the past now that Congress has mandated a five-fold increase in the renewable fuel by 2022, the head of the biggest U.S. ethanol lobbying group said on Monday.
The industry and Wall Street have been concerned about rising supplies of corn-based ethanol as well as tightening profit margins from the jump in corn prices to above $5 a bushel.
Bob Dinneen, president of the Renewable Fuels Association, told the Reuters Global Agriculture and Biofuels Summit that with crude oil at nearly $100 a barrel and the passage of the new energy bill calling for greater ethanol use, the future has never been brighter for the industry.
"I have not heard of anyone talk of a glut since December 19, when the president put his signature on the energy bill," he told Reuters.
Dinneen said the requirement in the bill that calls for 9 billion gallons of ethanol this year "obliterates anybody's notion that there is a glut of ethanol out there." Current ethanol usage is about 6.5 billion gallons per year.
He said with rising oil demand from the developing world, particularly India and China, the United States was going to need greater amounts of renewable fuels to help alleviate the rising prices of crude oil.
"We are clearly going to need significantly greater volumes of domestic renewables -- ethanol, biodiesel. The economics today are very favorable as you look at where prices are," Dinneen said.
He defended the continued use of tax incentives as well as the renewable fuel standard in the energy bill in order to get over the intransigence of the oil industry, which he said prefers refining hydrocarbons rather than carbohydrates. Continued...
© Thomson Reuters 2008. All rights reserved.
| Japan Investment | Jul 01 - 2, 2008 | Country Summits |
| Global Real Estate | Jun 23 - 25, 2008 | Real Estate |
| Consumer and Retail | Jun 16 - 18, 2008 | Consumer Retail |
| Investment Outlook | Jun 09 - 12, 2008 | Financial Services / Exchanges |
| Global Energy | Jun 01 - 5, 2008 | Energy |
