February 25, 2008

Technology can push limits of US ethanol production further  

Rising corn yields and improved ethanol technology will, in the long-run, push US production capacity for the fuel up above a commonly perceived ceiling of 15 billion gallons per year, National Corn Growers Association Chief Executive Rick Tolman said Friday.

Tolman, in an interview with Dow Jones Newsires, said the commonly cited ceiling does not really exist. By the year 2020, farmers could be getting corn yields of as much as 300 bushels per acre -- about double what they are now -- and refiners could be getting as much as 1,000 gallons of ethanol from an acre of corn -- about double what is being taken now.

With all that corn, Tolman said, refiners could push production to more than 20 billion gallons a year without depriving the livestock feed and food industries of the corn they need.

USDA Under Secretary Thomas Dorr, speaking to Dow Jones in a seperate interview at USDA's annual Agricultural Outlook Forum, agreed that the production of corn-based ethanol could eventually rise above 15 billion gallons per year.

A new renewable fuels standard in December calls for 36 billion gallons of renewable fuel production in the US by 2022, with 20 billion gallons of that to be cellulosic ethanol, 15 billion needs to be corn-based ethanol and 1 billion is mandated for biodiesel. The corn-based ethanol deadline is 2015.

Meeting that deadline for corn-based ethanol, Tolman said, will be easy. However, he was unsure whether cellulosic ethanol could reach that level of production.

USDA's Dorr said he was confident that rapidly improving technologies will assure that cellulosic ethanol production will be up to meet the challenge.

Most of the renewable, agriculture-based fuel called for in the new government mandate will have to come from cellulosic material and the process to produce it is not yet commercially viable. Research is making impressive strides, though, according to Dorr and other USDA officials.