EIA: Use of ethanol to climb significantly in first half of 2008

The U.S. Energy Information Administration said this month in a new report, Motor Gasoline Market Spring 2007 and Implications for Spring 2008, that it expects a year-on-year ethanol use to rise 50,000-120,000 b/d in the first five months of 2008:

        “Recalling that the 2006 switch from MTBE to ethanol put additional pressures on the gasoline markets and that ethanol is a growing source of gasoline volume, EIA also looks at projections of ethanol use in 2008.

        "While the new RFS that was included in the [recent] energy bill will require increased ethanol use, the speed of penetration into new regions may vary through the year, with slower increases expected for the first half of 2008 than in the second half. The year-over-year increase for January to May might vary between 50 and 120 thousand barrels per day.

“The lower volume (50 thousand barrels per day) is based on the average ethanol use increase seen in late 2006 through early 2007. This low estimate assumes that work on terminals and service stations and arrangements for transportation slow penetration in the early months.