• In this image from Jan. 6, 2015, corn is delivered to the Green Plains ethanol plant in Shenandoah, Iowa. Roughly 100 trucks a day filled with corn flow into the ethanol plant in southwest Iowa even as crude oil prices continue to collapse. Oil prices may have dipped below $50 a barrel for the first time since April 2009, but ethanol plants across the nation continue to operate at a brisk pace in order to satisfy a domestic and export demand that hasn’t weakened. (AP Photo/Nati Harnik)

    In this image from Jan. 6, 2015, corn is delivered to the Green Plains ethanol plant in Shenandoah, Iowa. Roughly 100 trucks a day filled with corn flow into the ethanol plant in southwest Iowa even as crude oil prices continue to collapse. Oil ... prices may have dipped below $50 a barrel for the first time since April 2009, but ethanol plants across the nation continue to operate at a brisk pace in order to satisfy a domestic and export demand that hasn’t weakened. (AP Photo/Nati Harnik) (The Associated Press)

  • In this photo from Jan. 6, 2015, a grain truck operator prepares his cargo of corn for delivery to the Green Plains ethanol plant in Shenandoah, Iowa. Roughly 100 trucks a day filled with corn flow into this ethanol plant in southwest Iowa even as crude oil prices continue to collapse. Oil prices may have dipped below $50 a barrel for the first time since April 2009, but ethanol plants across the nation continue to operate at a brisk pace in order to satisfy a domestic and export demand that hasn’t weakened. (AP Photo/Nati Harnik)

    In this photo from Jan. 6, 2015, a grain truck operator prepares his cargo of corn for delivery to the Green Plains ethanol plant in Shenandoah, Iowa. Roughly 100 trucks a day filled with corn flow into this ethanol plant in southwest Iowa even as ... crude oil prices continue to collapse. Oil prices may have dipped below $50 a barrel for the first time since April 2009, but ethanol plants across the nation continue to operate at a brisk pace in order to satisfy a domestic and export demand that hasn’t weakened. (AP Photo/Nati Harnik) (The Associated Press)

  • In this image from Jan. 6, 2015, corn is delivered to the Green Plains ethanol plant in Shenandoah, Iowa. Roughly 100 trucks a day filled with corn flow into the ethanol plant in southwest Iowa even as crude oil prices continue to collapse. Oil prices may have dipped below $50 a barrel for the first time since April 2009, but ethanol plants across the nation continue to operate at a brisk pace in order to satisfy a domestic and export demand that hasn’t weakened. (AP Photo/Nati Harnik)

    In this image from Jan. 6, 2015, corn is delivered to the Green Plains ethanol plant in Shenandoah, Iowa. Roughly 100 trucks a day filled with corn flow into the ethanol plant in southwest Iowa even as crude oil prices continue to collapse. Oil ... prices may have dipped below $50 a barrel for the first time since April 2009, but ethanol plants across the nation continue to operate at a brisk pace in order to satisfy a domestic and export demand that hasn’t weakened. (AP Photo/Nati Harnik) (The Associated Press)

Oil prices could cut into ethanol profits, but demand strong with federal biofuel mandate

Energy Associated Press

Ethanol producers will likely have to endure leaner profits this year because of the collapse of oil prices, but demand for the fuel additive will remain strong.

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The cheap oil will likely cut into ethanol profits because oil refiners will want to pay less for the corn-based additive.

But the industry is somewhat shielded by a federal biofuel mandate and the need to boost octane in gasoline.

Plus, University of Illinois agricultural economist Scott Irwin says, ethanol producers might thrive if exports or gas consumption surge higher than expected.

At Green Plains' ethanol plant near Shenandoah, Iowa, roughly 100 grain trucks a day continue to deliver corn to be converted into ethanol. CEO Todd Becker says ethanol has a permanent place in the fuel supply.