Chicago Board Of Trade Welcomes Indycar Series
May 14, 2007 | 4:17 P.M. EST
Rahal Letterman Racing Team Ethanol driver Jeff Simmons, IndyCar Series, national and state officials were given a tour of the trading floor by Chicago Board of Trade chairman Charlie Carey. The Chicago Board of Trade, a leading futures and options on futures exchange, lauded the IndyCar Series for its use of 100 percent fuel-grade ethanol for the 2007 season that includes the 91st Indianapolis 500 on May 27.
"Congratulations for this groundbreaking technological achievement in the racing community," Carey said in a news conference. "The (Indy Racing) League and its crown jewel, the Indianapolis 500, have a long tradition of technological and safety innovations. Just as the IndyCar Series is an innovator in the world of auto racing, CBOT is an innovator in futures products. Before ethanol became a daily news story, CBOT recognized the increasingly important role ethanol can play in meeting the nation’s energy needs."'
In March 2002, CBOT launched an ethanol contract that two years later is growing like corn in the fields across the Midwest.
"We believed that a growing industry needed more sophisticated pricing tools," Carey said. "The world looks to us to price ethanol as our contract is the benchmark for U.S. ethanol prices and is used for price discovery. We are proud of the success achieved thus far by our ethanol contract and optimistic about its future."
In 2006, U.S.-produced ethanol volume displaced 17 million barrels of imported crude oil valued at $11 billion, and the ethanol industry created 160,000 jobs. More than 1.8 million bushels of corn were used for ethanol production (17 percent of total U.S. production).
The IndyCar Series is the first in motorsports to use the environmentally-friendly and renewable fuel. Every car that takes the green and checkered flags in the Indianapolis 500 will show consumers there aren’t any performance issues in using either E10 or E85 blended ethanol-gasoline.
"We’re proud that the Chicago Board of Trade could welcome Jeff Simmons and the IndyCar Series as they make their way to compete in the Indianapolis 500 and romote ethanol as an alternative fuel source for America," said Chris Malo, the CBOT’s vice president of marketing and development. "We at the CBOT share the vision of the growing use of ethanol as an alternative fuel.
"When we launched our contract in 2002 we knew we were early to the marketplace, but we recognized the increasingly important role that ethanol can play in meeting the nation’s energy needs before ethanol became a daily news story. The liquidity in our futures contract continues to build, with recent record daily volumes and a total open interest approaching 700 contracts. While only five months old, CBOT ethanol swaps (contracts) recently topped 10,000 contracts transacted, which represents 140 gallons of ethanol.
"As this market grows and matures, we intend to continue to create new and innovative opportunities and services for the ethanol industry."
In 2005, Congress approved a fuel standard that called for increasing ethanol use to 7.5 billion gallons by 2012. President George W. Bush is seeking to more than quadruple the amount of alternative fuel produced – to 35 billion gallons – by 2017. There are more than 120 ethanol production facilities across the country, producing more than 5.4 billion gallons of ethanol annually, with more in various phases of development and construction.
"I don’t think Henry Ford (who in 1925 said that ethanol would be the fuel of the future) would be a bit surprised to see 33 cars at the starting line in the Indianapolis 500 with ethanol in their tanks," said Tom Dorr, Under Secretary for Rural Development, U.S. Department of Agriculture. "The Indy Racing League is re-branding ethanol as a premium fuel. It is mainstreaming ethanol, which is happening faster than most people in the industry can understand. We’ve talked about renewables in the United States for more than 30 years. Finally, it’s happening.
"Cellulosic ethanol will give us the potential to supply a third or more of the needs of our liquid fuels. We’ve obviously been pushed by rising oil prices, but we have a clear economic incentive to diversify away from oil. The growth has been pushed by strong policies by the Bush Administration, so it’s an exciting time to be involved.
"The Bush Administration salutes the IndyCar Series for its leadership."