Ethanol Faces Critical Point with MTBE Phase-out
Next six months will determine whether many markets decide to choose ethanol as their replacement for MTBE long term.
Compiled by staff
Published: Mar 8, 2006
Corn growers meeting in Anaheim, California for the annual Commodity Classic last week were upbeat about the increased demand for ethanol as a replacement for MTBE as an oxygenate in major population areas primarily in the East coast as well as Dallas and Houston, Texas. This is occurring even as concerns are being raised about tight supplies and higher prices.
Tom Slunecka, executive director of the Ethanol Promotion and Information Council, says that the ethanol industry will soon be in a critical six-month time period that will determine whether many markets decide to choose ethanol as their replacement for the long term.
"We certainly do hope that ethanol makes a good impression in these markets and that there's no concern over its ability to enrich the fuels from a pricing standpoint," Slunecka say. "We really need to make sure that the transition happens smoothly and that consumers are aware and happy about the product."
Slunecka's message to corn growers and other ethanol industry players is that they need to be very focused in these major markets now on reaching out to consumer influencers, such as mechanics, gas stations and car retailers.
"I don't think we've had a more critical point in time where we need the support of the ethanol industry. These are very large markets; when we look at the east coast market and Dallas for example, we are talking millions and millions of consumers and it simply takes volumes of materials to communicate to those folks."
Slunecka says the industry just needs to get through the current short supply situation quickly and ramp up production to bring prices down and meet consumer demand.
"Ethanol like every other industry is supply-demand driven and we have a very large increase in demand for our product right now so it is driving prices of ethanol up. The ethanol industry is building to this challenge so that within 18-24 months we will have enough capacity to handle this new market and prices will level out."
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