The U.S. is adding ethanol to the list of fuels it dominates in world markets.
Exports of the additive derived from corn rose 31 percent this year to the highest level since 2011, meeting demand from South Korea to Persian Gulf oil producers. The growth in sales follows a tripling of gasoline and diesel exports since 2009.
While the shale-oil boom created a stream of refined products flowing overseas, the ethanol surge is being driven by record crops. The U.S. is producing about 66 million metric tons more corn than a decade ago, almost as much as the rest of the world will export this year. Global demand for U.S. ethanol is helping ward off a glut after the government eased obligations to blend the fuel with gasoline.
“They have to have an export market,” Wallace Tyner, an agricultural economist at Purdue University in West Lafayette, Indiana, said by phone yesterday. “We’ve got excess capacity. It’s there, it’s ready, it’s reasonably priced.”
Denatured ethanol on the Chicago Board of Trade has increased 15 percent since Oct. 3, making it the best-performing fuel over the period. Crude oil by contrast slipped into a bear market, dropping 39 percent since June and spurring a 43 percent slump in gasoline futures.
With 14.9 billion gallons of ethanol capacity and no more than a 10 percent share of the 135 billion-gallon U.S. gasoline market, producers have no choice but to export, Tyner said.
The U.S. overtook Russia in 2010 to become the dominant exporter of petroleum products, shipping 2.31 million barrels a day, government data show. Overseas sales reached a record 4.38 million barrels a day a year ago. Crude oil exports, largely banned in the U.S., are dominated by Saudi Arabia and Russia.