KCCI.com, IA
10-01-07
Experts Say Ethanol Boom Tapers Off
Few Pumps Nationally Offer Ethanol Fuel
DES MOINES, Iowa -- Economists said the ethanol boom has been quietly
tapering off for months.
The supply of ethanol increasingly outpaces demand.
There's plenty of ethanol to go around, but there's not enough gas stations
nationwide offering the ethanol blend.
Ethanol plants have been popping up all around Iowa. The fuel takes Iowa corn
and turns it into a renewable fuel.
It's driven the cost of corn up, which is good for Iowa farmers.
Over the past few months, the price of ethanol has come down, and investors
have been applying the breaks.
"Each one is going to take a look at the current situation and make decisions on
how they're going to proceed," said Neil Harl, a retired Iowa State University
economics professor and consultant for producers.
He said profitability in ethanol production has been on the decline.
Ethanol is the most popular option on the renewable fuels table. It's generously
supported by Congress, with mandates to produce billions of gallons over the
next five years.
However, pumps are in short supply.
"Consumers could have lower price(d) fuel if we had better acceptance and
incorporation by the oil industry into the product they're putting on the market,"
said Lucy Norton of the Iowa Renewable Fuels Association.
Now Congress has to come up with continued subsidies and new ways to force
states and big oil to blend in the renewable fuel or ethanol plants could begin to
disappear.
Experts said the industry is bound to have rocky patches and that it is going
through one right now.
The huge supply of ethanol has driven prices lower.
However, the 10-percent blend is so small, consumers will not likely see much of
a break at the pump.
Drivers may be noticing a slightly bigger dip at the E-85 pump.