Posted on 10/02/2007 7:59:24 AM PDT by shrinkermd
The price of ethanol has fallen by 30% over the past few months as a glut of the corn-based fuel looms, while the price of ethanol's primary component, corn, had risen. That is squeezing ethanol companies' profits and pushing some ethanol plants to the brink of bankruptcy.
Some ethanol companies are "under deathwatch" now, says Chris Groobey, a partner in the project-finance practice of law firm Baker & McKenzie, which has worked with lenders and private-equity funds involved with ethanol.
That could be fine for big efficient players like Archer-Daniels-Midland Co., one of the nation's biggest ethanol producers by output. ADM and other big ethanol companies probably can ride out the storm, even though they might have to scale back on their production. Smaller players may not fare as well, and may be snapped up by bigger survivors.
The downturn exposes the industry's reliance on political support in Washington, which has offered tax credits to refiners to blend ethanol with gasoline, as well as tariffs on imported ethanol and other measures.
...Ethanol companies are seeking increases in pending energy legislation in the amount of ethanol refiners are required to use. At the same time, food, cattle, poultry and other interests are quietly nudging lawmakers to pull back on subsidies that encourage ethanol production and have indirectly led to increases in food costs due to the increase in the price of corn and other grains.
"It's probably going to get worse before it gets better," said Brian Bolster, a vice president in the investment-banking division at Goldman Sachs Group Inc., which has invested in at least one ethanol plant. He nevertheless remains bullish over the long term for the industry, amid expectations of increasing government support, infrastructure improvements and other factors.
(Excerpt) Read more at online.wsj.com ...
Being that energy independence is one of the top three most important issues facing the nation, ethanol is a step in the right direction.
Nuke power! Clean and plentiful. Just need to make it more practical.
You are joking, right? I did not see a sarcasm tag, so I have to ask.
Not to worry, I’m sure Harkin and Hagel (& the usual group of crop subsidy whores) are already drafting the bail-out legislation.
Guess congress will need to take more tax dollars and subsidize this failed program now. Can’t have people make something that no one wants and expect them to find something new to do.
Depending on who you believe, ethanol saves either an insignificant amount of energy or none at all. The energy required to produce and transport ethanol is roughly equivalent to the energy produced - no savings - just a big fat payday for ADM and corn belt farmers. Who in turn fatten the campaign war chests of our elected officials.
Read my lips: crude oil is the answer. Our own crude, that is.
you can’t really do that by having the govt specifically target ethanol when the market could come up with real alternatives on its own
Oil may still be cheap at $80 (inflated dollars).
$30 doesn’t buy half of what it did in the 80’s (exception is cheap chinese crap and cloths).
Yeah, cuz heaven knows OIL never booms and busts ...
Well, they can always bottle it for retail sales.
FOX had a story from the London Times that stated that scientists in London had demonstrated that bio-fuels produced as much green house gases as fossil fuel. Bio-fuels are just a scam.
The Texas based Blue Bell Ice Cream company has a slogan: “We eat all the ice cream we can and sell the rest”
Ethanol Producers should do the same: “We drink all the ethanol we can, then sell the rest”
Too many studies say that ethanol made from corn takes nearly as much energy to produce as it provides. Add in the costs of transportation, marketing, etc., and you've not gained anything.
The future is not corn ethanol, anyway. The brazilians don't use corn.
The future for America is coal and probably nuke.
ethanol is a step in the right direction?
YEAH, IF YOUR INTENT IS TO GO OVER A CLIFF!................
Energy independence is a bad idea, not attainable and not advisable to try. Of course, we should develop our own energy supplies. With the high price of crude oil and gasoline, the market has plenty of incentives to find alternative fuel supplies. I am not opposed to some government funding on the R&D for energy alternatives. The drive for energy independence is one excuse for the dims to nationalize the energy industry. Mandates for favored energy forms (ethanol, renewables, and conservation) will only lead to higher prices and lower supplies.
Rather than energy independence, we should focus attention on the OPEC cartel. If any of those nations are in the WTO, we should bring a case to impost tariffs to force an end to OPEC.
I need to correct my earlier statement, bio-fuel (made from corn)produces MORE green house gases than fossil fuel.
Here is an excerpt from the article:
It was accepted by the scientists that other factors, such as the use of fossil fuels to produce fertiliser, have yet to be fully analysed for their impact on overall figures. But they concluded that the biofuels “can contribute as much or more to global warming by N2 O emissions than cooling by fossil-fuel savings”.
The research is published in the journal Atmospheric Chemistry and Physics, where it has been placed for open review. The research team was formed of scientists from Britain, the US and Germany, and included Professor Paul Crutzen, who won a Nobel Prize for his work on ozone.
Dr Franz Conen, of the University of Basel in Switzerland, described the study as an “astounding insight”.
“It is to be hoped that those taking decisions on subsidies and regulations will in future take N2O emissions into account and promote some forms of ’biofuel’ production while quickly abandoning others,” he told the journal’s discussion board.
Dr Dave Reay, of the University of Edinburgh, used the findings to calculate that with the US Senate aiming to increase maize ethanol production sevenfold by 2022, greenhouse gas emissions from transport will rise by 6 per cent.
“Being that energy independence is one of the top three most important issues facing the nation, ethanol is a step in the right direction.”
Not really, it requires subsidies, is land and food source intensive and barely breaks even on net energy production.
Nuclear energy, on the other hand, would immediately substitute for oil and coal usage.
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