VeraSun files for bankruptcy!
News Flash: VeraSun, one of the largest ethanol producers announces filing for bankruptcy protection. From the Los Angles Times: VeraSun Energy Corp., the second-largest U.S. ethanol producer, filed for bankruptcy protection after making bad hedging bets on corn, a raw material used to make the fuel. The petition for Chapter 11 bankruptcy in Wilmington, Del., listed both assets and debt of more than $1 billion. The Sioux Falls, S.D.-based producer and seller of ethanol, which was formed in 2001, has 16 production facilities in eight states and an annual capacity of about 1.64 billion gallons of ethanol, according to its website.
Ironic situtaion as gas (blended with ethanol) sells for less than $2.00 per gallon in Nebraska: Check this Out, From: Omaha World-Harold
Current news headlines continue to read: oil prices and gas prices still going south, corn prices higher as rains delay harvest, credit for businesses dry up and ethanol plants shutting down.
Unfinished E85 plant being dismantled in Nebraska. Check this Out, From: Freemont Tribune.com.
Greater Ohio Ethanol Files Chapter 11: Check this out.
Go Ethanol Faces Shut Down, Investors and Banks will not commit money to continue: Check this out.
The stock prices of once-hot listings such as Aventine Renewable Energy and VeraSun Energy (filed for bankruptcy), is saying something. Archer Daniels Midland has fallen too, weighed down in part by its huge exposure to ethanol. Consolidation might help, but it won’t be easy. Some of the nation’s 177 working bio-refineries reside in rural hamlets with nothing else going for them. Source: ChicagoTribune.com
VeraSun shuts down ethanol plant in Montgomery County, Indiana. From the Hoosier Ag Today: With oil prices falling and the recessionary economy cutting consumer demand, is the boom in the ethanol industry over? On the surface it does not look good for the ethanol industry. Oil prices are approaching $60 a barrel, the profit margins for ethanol producers are shrinking, and the credit crisis is making capitol harder to come by.
Ethanol Production Plant, Picture Credit: MSNBC
From the Newton Kansan:
NEWTON —A deadline quietly came and went this week — and the end result is the Emerald City Ethanol plant, which was to be built northeast of the Harvey County Transfer Station, will not become part of the landscape.
Does this mean the ethanol hysteria has run out of gas and the boom is coming to a close even as new legislation is being introduced in Congress mandating E85 use in new vehicles by 2012?
What is going to happen to mandated bills in Congress for using E85 (85% ethanol and 15% gasoline)?
From Biofuels Digest: “Senators Joe Lieberman (I-CT), Ken Salazar of (D-CO) Colorado and Sam Brownback (R-KS) have co-sponsored the Open Fuel Standard Act of 2008 that would mandate that 50 percent of new vehicles by 2012 have E85, M85 (methanol) or warranted biodiesel capacity, increasing to 85 percent in 2015. The bill was also introduced in the US House of Representatives by a bipartisan group of legislators. The bill focused on the need to create energy independence for the US as a national security interest”.
Government officials have introduce bills for mandating E85 in new vehicles in the near future with the corn ethanol industry collapsing around them. The feds were sold a sham on corn ethanol being the answer to our fuel problems in the U.S. Sounded good, looked good on paper and with the government backing this program (with kickback money), no way this could fail, or so they thought.
Now, the government wants everyone to start using E85 and ethanol blends. A really big question. If we are going to run E85 in our vehicles, then where can I purchase E85 in Georgia?Do know how close you are to an E85 fueling station? Currently there are (10) E85 fueling stations in Georgia and Tennessee, the closest being 68 miles from Dalton, Ga. How does the government expect a complete transition to E85 when there are very few E85 stations in the South. How long will it be before we have an E85 in Dalton, Ga? How long will it take to get E85 fueling stations in other areas that do not have these stations already? Most southern states have only 4-6 E85 stations at present except South Carolina which has over 50 E85 stations.
Now, the biggest question of all? With all these ethanol plants shutting down, where will the ethanol production come from so E85 can be produced? Now is the time for Americans to get behind cellulosic ethanol production.
If you want to find out where the closest E85 fueling station is near you check out this LINK: National Ethanol Vehicle Coalition. Click on this link and follow the directions at top of the page.
USDA says Loans To Ethanol Producers Bad Business. From: Ag Weekly Online: The National Cattlemen’s Beef Association sent a letter to United States Department of Agriculture Secretary Ed Schafer this week expressing disappointment at his comments outlining Rural Development assistance for ethanol plants hurt by high corn prices. In remarks made in Des Moines, IA on Oct. 17, Shafer stated that, “There’s going to have to be some credit applied to companies to buy some lower-priced corn to blend with their higher-priced corn.”
The following statements was made in the comment section from a past CG post:Want to Save At the Pump, Try Fuel Blending!
“The world now produces only 20 billion gallons of ethanol. In the next 20 years, the world will need an additional 280 billion gallons of ethanol. There are no fuels other than oil derivatives and ethanol than can fuel internal combustion engines. There is no practical replacement for the internal combustion engine. Electric cars will be very small. Hydrogen fuel cells cars will be cost effective when gasoline is $22 per gallon. Hybrids and plug in hybrids all have internal combustion engines. India is building a new $2500 car with an internal combustion engine. There are 300 million people in India who can afford this car. China will be the largest producers of cars and trucks in the world in 10 years. All of the cars and trucks being produced in China have internal combustion engines.
Unless the world has sufficient fuel to power the necessary cars and trucks to move goods and people, the world will fall into an unecessary recession or worse. The only thing that will prevent this world wide recession is the production of an addtional 280 billions of gallons of ethanol.”
Gary Schwendiman, Ph.D,
College of Business Administration
University of Nebraska
Ethanol Capital Management LLC
A rude awakening according to the above article. Would you risk investment money in corn ethanol production after what has happened to the corn ethanol industry the last 12 months? If not, then How Does the U.S. come up with additional gallons of ethanol that will be needed in the future to fuel our vehicles?
Chemically Green has always said corn ethanol is not the best method for producing ethanol as a fuel replacement and supplement for gasoline. If America is going to produce ethanol and biodiesel, we will have to invest our dollars in cellulosic biofuels, not corn, soybeans and palm oil. Even with government subsidies, time has been against corn ethanol because corn is a commodity affected by prices, weather, flooding, oil prices and hurricanes. Congress and President Bush forgot one important factor in mandating corn ethanol as a fuel. They could not predict the weather and the price of oil. Will the U.S. have enough common sense to work out the ethanol dilemma so we can reduce our oil addiction or will we continue trying to use a commodity like corn to produce ethanol?