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Ethanol business all but popping
A tank holding ethanol at a fuel tank farm in the Global Petroleum facility in Boston, Mass.
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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.
Corn ethanol is most certainly NOT a good start. Heavily subsidized, it is the "cold fusion" of biofuels, producing only marginally more energy than is put into it. Staggering amounts of ground water are consumed in the process, drawing down aquifers. It is primarily a sop to Iowa politicians & the commodity corn industry and will contribute to soil erosion and more use of chemical fertilizers and herbicides.
Ethanol is bad for all engines, do not leave any vehicle sit for any length of time with anything less than a full tank, otherwise the ethanol will suck the moisture out of the air in the tank until you have a watery mess. You should write your congressional jerks at congress.org and demand (never ask)to stop mandating that we must use this crap. instead if gas stations were allowed to offer a choice of 100% gas and a 10% ethanol nobody would ever buy the ethanol blend.
