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The ethanol biz is looking like one of the worst places to be stuck in the middle of the current economic storm. Last week ethanol maker Aventine Renewable Energy Holdings said it was suspending construction of a biorefinery in Aurora, Neb., and extending the construction schedule […]

The ethanol biz is looking like one of the worst places to be stuck in the middle of the current economic storm. Last week ethanol maker Aventine Renewable Energy Holdings said it was suspending construction of a biorefinery in Aurora, Neb., and extending the construction schedule of a biorefinery in Mount Vernon, Ind. Well, “suspending” and “extending” look like wishful thinking now — on Wednesday Aventine filed for Chapter 11 bankruptcy.

We had already put those two plants on our biofuels deathwatch map, but it’ll be more serious than that for the company, which says it supplied almost 690 million gallons of ethanol to the U.S. in 2007. Aventine had another working plant in Aurora, Neb., and one in Pekin, Ill., and the Wall Street Journal points out that while the company has assets of $799 million, it has $491 million in debt.

View Biofuel Deathwatch List in a larger map

Aventine is by no means alone. At the end of October, VeraSun filed for bankruptcy due to what it said were “worsening capital market conditions and a tightening of trade credit” that led to “severe constraints on the Company’s liquidity position.” The economic crisis was just too much for an industry already beaten up by high corn prices last summer. Around this time last year corn prices were so high that Citigroup analyst David Driscoll predicted that close to three quarters of U.S. ethanol plants, or 123 of America’s 160 operating ethanol plants, were at risk of being shut down.

Aventine’s best bet will likely be finding a big buyer in the fossil fuel market. VeraSun ended up selling its assets to massive oil refiner Valero. Scooping up biofuel assets on the cheap is an easy way for an oil refiner to meet ethanol blending mandates.

By Katie Fehrenbacher

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