More U.S. Companies Dissolve Ethanol Plants

Weeks after a Citigroup analyst speculated that three out of four U.S. ethanol plants were in danger of closing, a Tennessee company canceled plans to build seven plants in Illinois, and a British-owned ethanol producer filed to reorganize under the bankruptcy code.

         Knoxville-based Heartland Ethanol spokesman Mike Craig said last week's decision to dissolve the company was based on the high price of corn. Also, the company was having a tough time borrowing money to build new, 55 million gallon per year plants in Illinois with local investors.

         Meanwhile, U.S. subsidiaries of U.K.-based Renova voluntarily filed for Chapter 11 bankruptcy protection last week, after agreeing to terms with lenders for $4 million in new working capital. The Heartland and Renova developments follow other producers delaying new plant openings, most citing the higher cost of corn.

         Earlier this month, VeraSun Energy, the second-largest U.S. producer, canceled plans for two Midwest ethanol plants totaling 220 million gallons per year, citing market conditions. Pacific Ethanol postponed construction of a 50 million gallon a year plant near Calipatria, Calif., following similar delays by Biofuel Energy, Agassiz Energy, Watonwan Energy and Little Sioux Corn Processors.

Comments

[Corny]

GM 's sudden stewardship of the environment is simply a way to continue to make gas guzzlers thanks to E85 an extremely inefficient fuel. The CAFE standards call for all car companies to achieve an average MPG for all vehicles. I believe the most recent number is 27 MPG. Well if you make the biggest money off of 10 miles per gallon SUV's you would hate to say good bye to them wouldn't you?
The CAFE standards has a loophole, that being that an E85 vehicle operating on E85 miles per gallon are ONLY figured against the actual amount of gasoline in the blend (15%) if you divide 100% fuel by 15% gasoline you get the multiplier to the mpg (666) therefore a gas guzzling 10 MPG SUV is given credit for 66.6 MPG. If you sell one SUV like this you can have 5 vehicles only achieving 20 MPG and this gas guzzling SUV and you average more than 27 MPG overall while not one of their vehicles really met the standard.
GM is not the only one taking advantage of this free ride Ford and Chrysler are too. The big three are heading down the toilet and this is just their hands clinging to the rim.