CBOT eyes 4Q launch for second US ethanol futures contract

By OGJ editors
HOUSTON, Apr. 21 -- Companies tracking US gasoline futures prices soon will be armed with another set of financial derivatives for a rapidly growing component of the nation's gasoline pool: ethanol.

The Chicago Board of Trade today disclosed that its board of directors approved the development of a corn-based ethanol futures contract. The new contract is expected to begin trading in the fourth quarter.

The CBOT ethanol futures contract thus will join a sugar-based ethanol futures contract announced last month by the New York Board of Trade (OGJ Online, Mar. 23, 2004). The NYBOT ethanol futures contract is scheduled to launch May 7, and its ethanol options contract on May 10.

Growth of ethanol volumes blended into in US gasoline is all but guaranteed, as a result of new energy legislation pending in Congress that mandates a minimum percentage of renewable fuels in reformulated gasoline (RFG), in tandem with proliferating bans on the only other widely available RFG oxygenate, methyl tertiary butyl ether.

Charles P. Carey, CBOT chairman, said, "There is tremendous growth potential in ethanol production. Today, ethanol production capacity in the US is 3 billion gal[/year], with expectations that it will grow into a 5 billion gal[/year] market."

In fact, the renewable fuels standard (RFS) in the energy bill pending in Congress requires 3.1 billion gal/year of renewable fuel use in the US transportation sector in 2005, increasing to 5 billion gal/year by 2012. In 2013 and beyond, the share of renewable fuel is to remain proportional to what was sold in the US in 2012.
The RFS has strong bipartisan support in Congress as well as by the White House (OGJ Online, Feb. 25, 2004).

CBOT Pres. and CEO Bernard W. Dan said, "The move to develop a corn-based ethanol contract is a direct result of discussions with ethanol producers and consumers who are seeking new alternatives to navigate the price fluctuations and volatility that characterize the ethanol market."

A CBOT spokesmen noted to OGJ Online that while the vast majority of fuel ethanol produced in the US is corn-based, sugar-based ethanol dominates the global market.

Related Articles

Construction under way for Texas ethane cracker

12/17/2014 Ingleside Ethylene LLC, a 50-50 joint venture of Occidental Chemical Corp. (OxyChem) and Mexichem SAB de CV (Mexichem), has started construction on...

Cooper to buy 50% of offshore Gippsland Sole gas field

12/17/2014 Cooper Energy Ltd., Adelaide, has bought a 50% interest in the offshore Gippsland Sole dry gas field in retention lease Vic/RL3 as well as 50% of t...

ExxonMobil lets contract for Antwerp refinery

12/17/2014 ExxonMobil Petroleum & Chemical BVBA has let an engineering, procurement, and construction contract to Fluor Corp. for a delayed coker to be in...

BPC report examines 40 possible options to reform RFS

12/16/2014 The Bipartisan Policy Center issued a report outlining 40 possible options for reforming the federal Renewable Fuels Standard in an effort to move ...

Turkish refinery secures Canadian financing

12/16/2014 Export Development Canada (EDC) said it is participating as lead arranger in the $3.3 billion debt-financing consortium supporting STAR Rafineri AS...

Angola’s Sonangol secures $2 billion loan for refinery, other projects

12/15/2014 China Development Bank (CDB) has extended a $2 billion line of credit to state-owned Sonangol EP to support expansion projects in Angola’s oil and ...

Pertamina plans $25 billion revamp of Indonesian refineries

12/15/2014 PT Pertamina (Persoro) has entered agreements with Saudi Aramco, JX Nippon Oil & Energy Corp., and China Petroleum & Chemical Corp. (Sinope...

EPA approves Magellan’s Corpus Christi splitter project

12/12/2014 The US Environmental Protection Agency has issued a final greenhouse gas prevention of significant deterioration construction permit to Magellan Pr...

Keyera to take majority interest in Alberta gas plant

12/12/2014 Keyera Corp., Calgary, will pay $65 million (Can.) to buy a 70.79% ownership interest in the Ricinus deep-cut gas plant in west-central Alberta.

White Papers

AVEVA NET Accesses and Manages the Digital Asset

Global demand for new process plants, power plants and infrastructure is increasing steadily with the ...
Sponsored by

AVEVA’s Approach for the Digital Asset

To meet the requirements for leaner project execution and more efficient operations while transferring...
Sponsored by

Diversification - the technology aspects

In tough times, businesses seek to diversify into adjacent markets or to apply their skills and resour...
Sponsored by

Engineering & Design for Lean Construction

Modern marketing rhetoric claims that, in order to cut out expensive costs and reduce risks during the...
Sponsored by

Object Lessons - Why control of engineering design at the object level is essential for efficient project execution

Whatever the task, there is usually only one way to do it right and many more to do it wrong. In the c...
Sponsored by

Plant Design for Lean Construction - at your fingertips

One area which can provide improvements to the adoption of Lean principles is the application of mobil...
Sponsored by

How to Keep Your Mud System Vibrator Hose from Getting Hammered to Death

To prevent the vibrating hoses on your oilfield mud circulation systems from failing, you must examine...
Sponsored by

Duty of Care

Good corporate social responsibility means implementing effective workplace health and safety measures...
Sponsored by

Available Webcasts


On Demand

Optimizing your asset management practices to mitigate the effects of a down market

Thu, Dec 11, 2014

The oil and gas market is in constant flux, and as the price of BOE (Barrel of Oil Equivalent) goes down it is increasingly important to optimize your asset management strategy to stay afloat.  Attend this webinar to learn how developing a solid asset management plan can help your company mitigate costs in any market.

register:WEBCAST


Parylene Conformal Coatings for the Oil & Gas Industry

Thu, Nov 20, 2014

In this concise 30-minute webinar, participants have an opportunity to learn more about how Parylene coatings are applied, their features, and the value they add to devices and components.

register:WEBCAST


Utilizing Predictive Analytics to Optimize Productivity in Oil & Gas Operations

Tue, Nov 18, 2014

Join IBM on Tuesday, November 18 @ 1pm CST to explore how Predictive Analytics can help your organization maximize productivity, operational performance & associated processes to drive enterprise wide productivity and profitability.

register:WEBCAST


US HYDROCARBON EXPORTS Part 3 — LNG

Fri, Nov 14, 2014

US LNG Exports, the third in a trilogy of webcasts focusing on the broad topic of US Hydrocarbon Exports.

A discussion of the problems and potential for the export of US-produced liquefied natural gas.

These and other topics will be discussed, with the latest thoughts on U.S. LNG export policy.

register:WEBCAST


Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!

 

Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected