Photo by MikeGroft. Licensed under Creative Commons license 2.0.

The weekly email from the U.S. Department of Energy's (DOE) Office of Energy Efficiency and Renewable Energy (EERE) arrived today and it contains one important number: 6.48 billion gallons. That's how much ethanol - almost all of it from corn - was made in the U.S. last year, a total that comes to an average of 423,000 barrels per day. Compared to 2006, this is an increase of 34 percent. Still, more corn will be needed to reach the Energy Independence and Security Act of 2007's new Renewable Fuel Standard for 2008: eight billion gallons. A problem? Not according to the Renewable Fuels Association, which says that current biorefinery capacity is 13.4 billion gallons per year. With 57 new refineries on the way, the eight billion gallons will be here before we know it.

[Source: EERE]

VeraSun Energy and US BioEnergy, two large American ethanol producers, have announced a merger agreement that should take place in the first quarter of 2008. The combined company will be called VeraSun. The boards of directors of each company unanimously approved the merger, so there shouldn't be any executive challenges to the new company (anti-trust problems, if any, will become apparent later), which will have an annual ethanol production capacity of over 1.6 billion gallons by the end of next year.

Let's hold up with that statement for now, because there is a little asterisk in the press release (read it yourself after the break) that anything beyond the 1.6 billion gallon number is "Assuming construction resumes in 2008, which will depend on market conditions." As we all know, the ethanol market is not exactly in the strongest shape it's ever been in these days. With the low prices and product glut and lots of criticism of corn ethanol, I'm sure at least some at the two merging companies are glad to be spreading around the risk with this deal.

[Source: VeraSun Energy Corporation]