The U.S. ethanol boom could push natural gas prices even higher as the explosion of new distilleries and a soaring corn crop raise industrial and agricultural demand, according to Reuters
Ethanol refineries tend to use natural gas-fueled boilers, and natural gas is also used in the production of fertilizer for corn, which is the main feedstock for ethanol in North America.
Experts said that the ethanol boom could add roughly one percent to U.S. natural gas demand within a year and a half, magnifying an already tight balance between production and rising consumption from homes, businesses, and power plants.
Ethanol production increased by 25 percent last year and is set to rise even more in the next few years.
The United States already has about 116 ethanol distilleries, with 78 plants under construction and seven undergoing expansion. If all the new plants and expansions come on line, total capacity will be above 12 billion gallons per year, according to the Renewable Fuels Association.
According to Reuters
, gas prices this year are expected to average seven percent higher than last year as growth in domestic production and imports fails to keep up with rising demand.