05/20/2008 10:14 AM

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Weekly Clean Energy Roundup May 21, 2008

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Looking ahead, the U.S. Department of Agriculture (USDA) expects the total use of U.S. corn to decrease by 2% in the 2008 and 2009 season, despite a 33% increase in the amount of corn going toward ethanol production. Although ethanol biorefineries will require 4 billion bushels of corn, feed and residual use will decline 14%, and exports will drop 16% in the face of growing global competition, according to the May 9 edition of "World Agriculture Supply and Demand Estimates." The total corn crop is estimated at 12.1 billion bushels, down 7% due to less planted acres and a projected decrease in yield.

This will cause corn use to exceed production, decreasing corn stocks and pushing prices higher, to a record $5-$6 per bushel. Meanwhile, adverse weather conditions have continued to delay corn plantings, threatening to further lower U.S. corn production. The May 19 edition of "Crop Progress" reports that only 73% of the corn has been planted in the major corn-producing states, placing this year's crop 15 percentage points behind the five-year average. Only 26% of the corn plants have emerged, compared to the five-year average of 56% for this time of the year. See the USDA's world agriculture report (PDF 92 KB) and Crop Progress report (PDF 216 KB).

DOE Stops Filling the Strategic Petroleum Reserve

DOE announced last week that it will not sign contracts this year for the addition of up to 13 million barrels of crude oil to the nation's strategic petroleum reserve (SPR). The move anticipated the "Strategic Petroleum Reserve Fill Suspension and Consumer Protection Act of 2008," which President Bush signed on Monday. That bill suspends additions to the SPR through the end of the year, unless the price of oil drops below $75 per barrel.

DOE planned to start adding 76,000 barrels per day to the SPR from August through December, increasing the SPR from its current capacity of 727 million barrels toward its eventual goal of 1 billion barrels, as set by the Energy Policy Act of 2005. Congress decided to halt SPR additions in response to current high oil prices. See the press releases from DOE and the White House and the full text of the bill, House Resolution 6022.

Stopping the addition of oil to the SPR was meant to reduce demand pressures on oil, but if it has had any impact on oil prices, it was not apparent as of yesterday. The price of light, sweet crude oil for July delivery settled near $129 per barrel on Tuesday, while the daily price of a "basket" of crude oils compiled by the Organization of the Petroleum Exporting Countries, or OPEC, held nearly steady on Monday, at $119.24 (this includes heavier crude oils that are not well suited to the U.S. market).

Meanwhile, both diesel fuel and gasoline set new retail price records on Tuesday, with diesel fuel reaching $4.539 per gallon and gasoline hitting $3.80 per gallon. See the latest oil prices on the New York Mercantile Exchange and OPEC Web sites, and for the latest retail fuel prices, see the American Automobile Association's Fuel Gauge Report.

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Kevin Eber is the Editor of EREE Network News, a weekly publication of the U.S. Department of Energy's Office of Energy Efficiency and Renewable Energy (EERE). 

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