Ethanol business all but popping
TEXT OF STORY
Steve Chiotakis: In Denver, there’s a big ethanol event going on this week. Don’t expect folks there to be all bubbly about the future — the ethanol business has been plagued by bankruptcies and idle plants the past year and a half. From the Marketplace Sustainability Desk, Sarah Gardner reports.
Sarah Gardner: Nearly every ethanol producer in the U.S. and Canada is at this week’s conference — and they have plenty to commiserate about. Volatile corn and energy prices, the credit crunch and the recession have all hurt the industry.
Dan Basse, president of AgResource, expects the shakeout will continue.
Dan Basse: More consolidation, fewer players, people who better understand the industry and are able to make risk decisions at a much higher profile.
Those high-profile players include the big oil refiner Valero, which is buying up seven ethanol plants from a bankrupt producer. Other big oil companies, including Shell and BP, are investing in ethanol made from plant waste.
Matt Hartwig is with the Renewable Fuels Association:
Matt Hartwig: I think the oil companies recognize that ethanol isn’t going away.
Still, corn ethanol especially faces increasing scrutiny from environmentalists who argue it’s production is too energy-intensive and ultimately damages the planet.
‘m Sarah Gardner for Marketplace.
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