Governors Beverly Perdue from North Carolina, Mike Beebe from Arkansas, Martin O’Malley of Maryland and Jack Markell of Delaware became the latest group in the last few weeks to ask the Environmental Protection Agency for a rollback in the Renewable Fuel Standard. They said relief was needed to help livestock and poultry producers who have seen higher feed costs because of soaring corn prices, as well as for consumers who would end up paying more at the grocery store to purchase these items. [Get ready to pay 30% more for your groceries by December.]
This is going to become a big story over the next few months. Debate will be over killing the ethanol industry or letting millions of humans starve in 3rd world nations. The United Nations is already seeing grain hoarding as costs go up and supplies go down. There will be riots over this in Africa. What would you do if your family was starving?
I met with some refinery experts yesterday. They said if the ethanol mandate is dropped most refiners will be hard pressed to replace it since the refineries have been retooled for the ethanol. About 800,000 barrels per day of ethanol goes into our fuels. If it all went away, it would increase crude oil demand by twice that number.
More on Ethanol Issue
More on Ethanol Issue
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: More on Ethanol Issue
The governors join a growing chorus of lawmakers and trade groups asking the EPA to lower or suspend the RFS. In just the last month, more than two dozen U.S senators and 156 members from the U.S. House, along with officials from livestock and poultry industry, have asked the Obama administration to temporarily suspend the mandate.
Proponents for a reduction in the RFS contend the seven-year-old measure, which requires 13.2 billion gallons of corn-based ethanol to be blended into the vehicle fuel supply in 2012, has made it even more expensive to acquire the feed they need, and a waiver could help lower prices by freeing-up millions of bushels of corn. Ethanol is expected to consume 42 percent of the country’s corn production this year, the U.S. Agriculture Department said on August 10.
Using this much food to make fuel is insane!
Proponents for a reduction in the RFS contend the seven-year-old measure, which requires 13.2 billion gallons of corn-based ethanol to be blended into the vehicle fuel supply in 2012, has made it even more expensive to acquire the feed they need, and a waiver could help lower prices by freeing-up millions of bushels of corn. Ethanol is expected to consume 42 percent of the country’s corn production this year, the U.S. Agriculture Department said on August 10.
Using this much food to make fuel is insane!
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: More on Ethanol Issue
Good article on this subject.
http://www.triplepundit.com/2012/08/hal ... g-drought/
As an energy sector investor, it is important to note that this is already impacting crude oil prices. What we do abou ethanol is just one part. Water shortages are another big issue. E&P companies need a lot of water (125,000 bbls per well) to develop the shale plays.
I believe this year's drought will have a major impact on oil prices for at least a year.
http://www.triplepundit.com/2012/08/hal ... g-drought/
As an energy sector investor, it is important to note that this is already impacting crude oil prices. What we do abou ethanol is just one part. Water shortages are another big issue. E&P companies need a lot of water (125,000 bbls per well) to develop the shale plays.
I believe this year's drought will have a major impact on oil prices for at least a year.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group