EIA: 2015, 2016 Ethanol Output Steady

OAKHURST, N.J. (DTN) -- Ethanol production, which averaged 935,000 barrels per day (bpd) in 2014, is forecast to remain near current levels in 2015 and 2016, with four-week average output through July 31 at 971,000 bpd, the Energy Information Administration said on Tuesday.

For demand, EIA expects ethanol consumption, which averaged 878,000 bpd in 2014, to average about 900,000 bpd in both 2015 and 2016, estimating ethanol would account for a 9.9% share of the total gasoline pool during these years. EIA does not expect significant increases in E15 or E85 consumption over the forecast period.

EIA said these expectations are modeled off the Environmental Protection Agency's proposed rule setting Renewable Fuel Standard targets for 2014 through 2016 issued on May 29.

The proposed RFS targets are expected to encourage imports of Brazilian sugarcane ethanol, which were 3,000 bpd in 2014. Because of the expected increase in ethanol gross imports, net exports of ethanol are forecast to fall from 51,000 bpd in 2014 to 43,000 bpd in 2015 and to 37,000 bpd in 2016.

EIA said it expects the largest effect of the proposed RFS targets to be on biodiesel consumption, which contributes to meeting the biomass-based diesel, advanced biofuel and total renewable fuel RFS targets.

Biodiesel production averaged an estimated 81,000 bpd in 2014 and is forecast to average 91,000 bpd in 2015 and 98,000 bpd in 2016.

Net imports of biomass-based diesel are also expected to increase from 16,000 bpd in 2014 to 24,000 bpd this year and 35,000 bpd in 2016.

"EIA expects that a combination of higher biomass-based diesel consumption, higher consumption of domestic and import ethanol, and banked Renewable Identification Numbers will help meet the newly proposed RFS targets through 2016," according to the latest Short-term Energy Outlook.

EIA estimates that carbon dioxide emissions grew 1.0% in 2014 and are projected to decrease by 0.2% this year and then rise by 0.7% in 2016. These forecasts are sensitive to both weather and economic assumptions. Monthly carbon dioxide emissions from the electric power sector were at a 27-year low in April, which is typically the month with the lowest generation level in each year.