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Topic: Ethanol
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| Agency: Federal Trade Commission
Date: 30 November 2007 [Non-automotive content removed.] |
As of September 2007, 103 firms produced ethanol in the United States, a one-year increase of 13 firms, and a two-year increase of roughly 28 firms. The largest ethanol producer’s share of capacity has continued to fall each year as new firms enter the market. Currently, the largest producer accounts for approximately 16 percent of domestic ethanol capacity, down from 21 percent in 2006, 26 percent in 2005, and 41 percent in 2000.
As in the previous reports, FTC staff used three different methods of calculating the concentration of the ethanol production industry. Specifically, staff calculated concentration based on the production capacity of each individual producer and on the production capacity of each producer when attributing each producer’s capacity to the firm responsible for marketing the producer’s ethanol. Staff then confirmed these results using the actual production rather than capacity. The study concludes that the level of concentration in ethanol production would not justify a presumption that a single firm, or a small group of firms, could wield sufficient market power to set or coordinate price or output levels. According to the staff, however, the results cannot preclude the possibility that future mergers within the industry may raise competitive concerns.
The study, which is available on the Commission’s Web site and as a link to this press release, was submitted to Congress and the Administrator of the U.S. Environmental
Protection Agency, as required by Section 1501(a)(2) of the Energy Policy Act of 2005, as codified at 42 U.S.C. § 7545(o)(10). The Commission vote to issue the 2007 study, which was prepared by the staff of the Bureaus of Competition and Economics, was 5-0. (FTC File No. P063000; the staff contact is John H. Seesel, Associate General Counsel for Energy, Office of the General Counsel, 202-326-2702.)
Copies of the documents mentioned in this release are available from the FTC’s Web site at http://www.ftc.gov and from the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, DC 20580. Call toll-free: 1-877-FTC-HELP.