- Biofuel industry is growing more dependent on exports
- EPA in May proposed to reduce ethanol blending targets
Vireol Bio Energy LLC suspended output at its Hopewell, Virginia, ethanol plant, blaming 2015’s rout in crude oil prices.
The company shuttered the 62 million gallon-a-year mill as oil’s 48 percent drop in the past year dragged gasoline prices lower and placed a cap on ethanol, Peter McGenity, Vireol’s chief executive officer, said in a telephone interview Monday.
Federal Standards require oil refiners to blend ethanol into gasoline. The fuel currently accounts for about 10 percent of gasoline consumption. President Barack Obama’s May proposal to reduce ethanol consumption targets from statutory levels has threatened to stifle growth, while uncertainty around the program has rendered the U.S. biofuel industry more dependent on exports.
“We decided to shutter the plant until the market improves,” McGenity said.
Denatured ethanol for September delivery rose 1.7 cents, or 1.2 percent, to $1.46 a gallon on the Chicago Board of Trade. Prices are down 33 percent in the past year. Corn, used to make ethanol in the U.S., has risen 2.3 percent.
Vireol is a so-called destination plant, meaning it’s outside of the corn-rich Midwest. It buys the majority of its feedstock from the Fort Wayne, Indiana, area, about 650 miles northwest of Hopewell, McGenity said.