Looming Glut?

Cindy Zimmerman

Here we go again – feast or famine time. Reuters is reporting that there could be a “looming glut” of ethanol ahead. Just a month ago we couldn’t produce enough.

I especially like the fact that this story is based on the predictions of one person, Fimat Energy analyst Antoine Halff, who says, “Surging capacity … poses daunting challenges for the ethanol industry, including heightened competition for feedstock and the logistical headache and costs of shipping ethanol from the Midwest to the main gasoline markets.”

Halff predicts that by the end of 2008, ethanol production capacity in the Midwest will be sufficient to replace 25 percent of Midwestern gasoline demand and he suggests that the solution to the problem will likely be the wider adoption of E85.

Sounds like good news to me.