The United States isn’t merely a major producer of ethanol, it’s the world’s main exporter of it.
A couple of weeks ago I wrote about how, despite signs of the nation’s improving financial health, consumers aren’t feeling better about the economy yet. And that, in turn, means consumer spending has been slower to rebound. But it looks like times could be a changin’.
“Ever since the United States emerged from the recession, economists have been watching for signs that Americans are spending again," reported the New York Times on Friday. “Evidence is building that they are … Economists now are cautiously forecasting a turnaround in spending.”
According to the Times, American Express, MasterCard, and Visa have reported consumer spending from January to March helped fuel an increase in card spending. External factors — such as the housing and job markets and energy prices — have influenced spending over the past few years, and the improving condition of the former factors seems to have had an uplifting effect on consumers’ budgets.
Still, the price of fuel is on everybody’s radar, and the Obama Administration is taking a stance meant to counter critics’ claims that its current policies are driving up gas prices and preventing job creation, the New York Times reports. With the cause and solutions for rising gas prices on my mind, a few recent articles caught my eye. I never thought I’d see the day when headlines announced: “U.S. becomes net exporter of fuel as buyers struggle at the pump” and “Brazilian imports of U.S. ethanol soar.”
According to the Financial Times, the United States shipped more petroleum products each day in February than it purchased. That’s not to say U.S. consumption has declined. In fact, it’s increased, but according to Rayola Dougher of the American Petroleum Institute, “We still have plenty available for export.”
So where is this refined fuel going? Notably, Brazil. “The steep rise in sales ... reflects the U.S. industry’s growing commercial strength,” reports the Financial Times. Brazil’s supply of sugarcane-made ethanol has not been able to meet demand, which has required the South American country to import ethanol and opened the door for the United States to become the world’s second-largest ethanol exporter.
U.S. producers of corn ethanol believe they are reaching a point where they can compete without tax subsidies and state support; good timing, as legislation has been proposed that would drastically reduce such perks and put them on a sliding scale based on the barrel price of crude oil. Which brings us back to shifts in the Administration’s policies. According to the New York Times, Democrats say the president’s most recent proposals make sense “as part of a broader policy that includes revoking tax breaks for the oil industry.”