HighQuest Partners And Soyatech Release Findings From New Biofuels Report

Boston, MA - HighQuest Partners LLC and its subsidiary Soyatech LLC have released a new report, Biofuels 2006: Production, Supply and Reality, which examines not only projected growth and prospects for biofuels production, but also the ramifications for the nation's agricultural and food industries, according to the company.

The report projects U.S. biofuels production to grow to over 16 billion gallons per year by 2015. Ethanol will account for 14.2 billion gallons, increasing from 4.5 billion gallons in 2006, with the remaining 2.15 billion gallons in biodiesel. Ethanol will represent 9.4% of gasoline consumption, and biodiesel will equal approximately 4% of total estimated diesel consumption. The vast majority of ethanol sold in the U.S. is E10, a mixture of 90% gasoline and 10% ethanol, which can be distributed through regular gasoline pumps and used in regular gasoline-fueled vehicles. The level of ethanol production forecast by this study is not dependent on a build-out of E85-capable pumps or widespread adoption of E-85 capable Flex-Fuel Vehicles.

The report states that forecast production levels will affect not only use of agricultural resources, but will also likely alter the dynamics of international trade in certain commodities. For example, corn used for ethanol fuel production will come out of stocks now allocated to exports and animal feeds. Since the U.S. supplies more than 60% of the international trade in corn, reallocation of this source to fuel will likely translate into higher prices for corn globally. Secondarily, corn is a major source of animal feed. Diverting corn toward ethanol production will potentially drive up the cost of meat and dairy products as well, and could result in lower livestock production, according to HighQuest.

At the same time, the increase in biodiesel production is expected to have a significant impact on importation of vegetable oils, according to HighQuest. The U.S. is currently a net importer of vegetable oil at approximately 4.8 billion pounds per year. The report projects that these imports will reach 20.5 billion pounds in 2015, an increase of more than three hundred percent.

SOURCE: HighQuest Partners LLC