The EIA released new data on ethanol’s and biodiesel’s movements by rail. Unlike other liquid fuels that are most commonly transported by pipeline, ethanol and biodiesel are more often transported by rail because both fuels attract water and other impurities in pipelines, according to the EIA.

The estimates cover rail movements of ethanol and biodiesel within each Petroleum Administration for Defense District (intra-PADD) and between different PADDs (inter-PADD), as well as rail movements to and from Canada.

Ethanol's travels - Oil & Gas 360 - EIA

Graphic: EIA

Ethanol exports are small compared to domestic consumption

Almost all ethanol and biodiesel end up in the motor gasoline or diesel pool, respectively. The only other outlet for fuel ethanol or biodiesel is exports, which are small compared with domestic consumption.

In 2015, the ethanol share of gasoline was 9.9%, and the biodiesel share of distillate was 2.4%. Most ethanol and biodiesel is produced in the Midwest (PADD 2), where it is then shipped to other regions. In 2015, the Midwest shipped 593,000 barrels per day (b/d) of ethanol by rail and 16,000 b/d of biodiesel by rail. The East Coast (PADD 1) receives almost half of the ethanol moved by rail. Biodiesel by rail receipts are about the same in all regions except the Mountain region (PADD 4), the EIA reported.

According to the Renewable Fuels Association, U.S. ethanol exports started big in Jan. 2016, expanding 7% over December volumes to a 14-month high.

The industry shipped 87.1 million gallons (mg) in January, with China taking a third of the market at 29.4 mg—rivaling the record of 32.6 mg to China last October. Meanwhile, the long-time top export destination of Canada received just 13.7 mg—the lowest volume of exports north of the border since October 2010.

The United Arab Emirates (10.9 mg) and South Korea (10.4 mg) were other top markets in January. Brazil brought in a fairly sizable volume (6.6 mg) considering its recent absenteeism from the U.S. export picture. January’s robust exports equate to 1.05 billion gallons on an annualized basis.

However data out this week from the RFA revealed a swing in the opposite direction for the biofuel in February. Exports of U.S. ethanol totaled 67.0 million gallons (mg) in February, down 23% from January’s 14-month high, according to RFA analysis of government data.

Brazil overtook Canada and China as the top destination for U.S. product in February, receiving 22.1 mg. “Exports to Canada were 14.5 mg, up 6% over January volumes. Meanwhile, exports to China tallied at 8.9 mg, down from 29.4 mg in January. India re-entered the market with imports of 8.5 mg of U.S. ethanol, while the Philippines persisted as a top customer with 5.5 mg. Notably, South Korea was absent from the list of U.S. export recipients in February. Year-to-date exports stood at 154.1 mg, up a hair from the year-ago total of 153.9 mg,” the RFA reported.

Converting to a measure of 42 gallons in a barrel, total year-to-date exports of ethanol in 2016 came to 3.7 million barrels. By comparison, Energy Directions reported that last week’s gasoline demand averaged 9.224 million barrels per day.

Slack demand for ethanol is causing problems in Southeast Asia. According to a Southeast Asian news site, “three multimillion-dollar ethanol manufacturing plants, aimed at supplying materials to make biofuels, developed by oil and gas giant PetroVietnam have proven an investment failure, as there is little demand for the environment-friendly gasoline in Vietnam.”


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