Ethanol production plummets as people drive less during pandemic

Ethanol plants across the country are shutting down due to greatly reduced demand for gasoline as Americans stay home to slow the spread of the coronavirus. At least 44 of the nation's 187 plants stopped production last week as prices hit record lows, said Josh Roe, the vice president of market development and policy at the Kansas Corn Growers Association. Another 62 had scaled back production by at least 50 percent. Ethanol -- which is made from corn -- was trading at under 90 cents per gallon on Monday, down from nearly $1.50 at the start of the year, according to the Chicago Mercantile Exchange. Industry groups expect production to continue to drop until more people begin to leave their homes and start to drive again. Demand for ethanol is closely tied to demand for finished gasoline. Federal law outlined in the Renewable Fuel Standard requires oil refiners blend a minimum percentage of biofuels into their petroleum products. Most of the finished motor gasoline sold in the United States contains at least 10 percent ethanol. Demand for ethanol and gasoline are falling at about the same rate. Finished motor gasoline production dropped more than 40 percent between Feb. 28 and April 3, according to the Department of Energy. Ethanol production during that same period dropped about 35 percent...MORE