Hand Sanitizer Holds Out Weak Lifeline for Embattled U.S. Ethanol Industry
Ethanol producers struggling through the economic fallout from the coronavirus pandemic are welcoming new U.S. government rules that will permit them to provide alcohol for the manufacturing of hand sanitizer. But there is widespread doubt that hitching ethanol’s fortunes to the pandemic supply chain will prove much of a lifeline.
“Responding to concerns from renewable fuel advocates, the U.S. Food and Drug Administration this week relaxed regulations that would allow ethanol producers to provide alcohol for the manufacturing of sanitizer,” writes MiBiz. But while a number of ethanol plants are “exploring options” for this new market, there is considerable doubt that the ventures will rescue an industry in a “sharp decline as driving and fuel consumption nosedives.” Gasoline consumption for automobiles dropped nearly a quarter over the past week, according to the U.S. Energy Information Administration.
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“We’re having a real hard time right now even keeping the plant operational,” said Gabe Corey, commodities and risk manager for Carbon Green BioEnergy LLC. His company, which runs an ethanol production plant in Lake Odessa, Michigan, has been investigating the ethanol-for-sanitizer option, but doesn’t foresee massive success in the endeavour.
“It doesn’t appear we could even make enough to sell the hand sanitizer to offset the reduction in driving,” he said. “But it’ll help some.”
In Michigan, which is under a shelter-in-place order, gasoline demand “has dropped by up to 60 to 70%,” added Corey—a fact that has devastated his company’s Odessa plant, which now remains open “day to day”. He also predicted though times for farmers who supply the corn from which the ethanol is derived, warning that the pandemic “is going to have a huge economic impact on the agriculture industry.”
Reporting on the ethanol sanitizer story several weeks ago, Biofuels Digest observed that even with hand sanitizer in such scarce supply, there is hardly sufficient consumer demand to completely support the ethanol industry.
“To pivot entirely to producing hand sanitizer, every adult in the United States would have to sanitize more than 625 times per day,” the industry publication notes.