Comments to EPA on 2020-2022 RFS Rule: Stillwater

1 2022 Potential Ethanol Production

EIA lists the U.S. ethanol nameplate production capacity for 2020 at 17.38 billion gallons per year. How much of this ethanol production capacity can be used is primarily a function of the available feedstock, corn, and the conversion capacity of ethanol plants. We consider three different approaches to determine the real world maximum potential ethanol production in 2022: historical maximum, previous year, and potential expansion.

The highest year of ethanol production was 2018, when 16.061 billion gallons of ethanol were produced domestically. In 2021, it is estimated that 14.87 billion gallons of ethanol were produced. We believe that both of these figures represent conservative estimates of how much ethanol could reasonably be produced in 2022. The 2021 volume was suppressed substantially by low demand for transportation fuel in response to the Covid-19 pandemic. And neither figure accounts for the continuing growth in the productivity of U.S. corn growers or the steady improvements in the efficiency of U.S. corn ethanol plants. As explained below in greater detail, these developments have allowed U.S. ethanol production to continuously increase their production capability without requiring increasing corn acreage or adversely impacting the supply of corn available for other domestic non-ethanol demands or export markets. In fact, we conclude that, accounting for these developments, 15.565 billion gallons could be produced domestically in 2022.

While the 15.565 billion gallons of ethanol for 2022 in Table 4 seems like an upper limit on ethanol production in 2022, it is in fact limited by the decision to keep the planted acres constant the decision to keep the portion of corn used for ethanol constant, and the representation of new technology implementation as a straight line. The reality is that market forces are always in play. A positive future market outlook may cause more acres to be planted in corn that year. It may cause plant maintenance to be delayed until next year. A very promising technology may be implemented earlier and to a larger extent than typical technology is implemented. Table 4 and the other tables in that section represent average conditions which can be increased or decreased by each farmer or ethanol production facility’s market outlook. Indeed, as noted, the actual ethanol production in 2018 exceeded our projection for 2022 by a
substantial margin, at a time when yield rates and conversion efficiency were lower than they are now.