Ethanol Glut Puts Third Plant on Hold in as Many Months


As an old high school teacher of mine always used to say, “Three trees make a row,” meaning it only takes three occurrences to equal a trend. Ethanol producer Pacific Ethanol said today it has suspended construction of its Imperial Valley plant near Calipatria, Calif. “until market conditions improve” — the third ethanol plant whose construction has been put on hold in the last three months.

Back in October, BioFuel Energy Corp. (BIOF) said it would halt work on its third planned plant due to a production glut and dropping ethanol prices. Just weeks earlier, also citing current market conditions, VeraSun said it would suspend construction of a 110-million-gallon-per-year ethanol biorefinery in Reynolds, Ind.


The “market conditions” that these ethanol producers are referring to is the fact that the average price of ethanol has dropped some 30 percent since May, as market subsidies combined with a lack of infrastructure for its delivery and use have created a surplus of the renewable fuel. Add in the rising cost of corn, and some ethanol producers have been pushed to the brink of bankruptcy in recent months.

Pacific Ethanol made headlines in late November after an investment fund controlled by Bill Gates said it planned to sell off its 20 percent stake in the ethanol maker. The cascading effect of Bill Gates saw a 22 percent drop in the company’s stock to under $5 per share, which is nearly one-tenth of the $42 share price that Pacific Ethanol traded at during the glory days of ethanol investment a year and a half ago.

Despite the fact that the company secured up to $35 million in financing from the state of California last week, the company’s financials don’t look too impressive. In early November, Sacramento, Calif.-based Pacific Ethanol reported a third-quarter net loss of $4.84 million on sales of $118.1 million and said its gross profit margin fell to 4 percent from 12.2 percent in the same quarter a year earlier. Ouch!



Ethanol makers keep saying that we get rebates when we use their garbage, and that its given at the pump. WRONG!!! Due to ethanol being subsidized MORE is spent on every drop of the junk. Let alone the Fact that you get Less horsepower and gas milege from the blend. I have seen some cars that the manufacturer says not to put the junk in their cars. And have seen some cars that are higher end, quality cars that lose almost 40 percent in mileage as compaired to running on straight gasoline. But every one of these companies will argue with people that know, mechanics like me and other that can run the numbers and they will say we are wrong. Well when you go from 48 mph on gas to 30 and it never comes back up because of the damage the crap causes. Doen’t tell me that it is of a benifit to anyone but them and car manufacturers who get to have you come and have to buy a new car more often because of the damage and extra wear and tear that ethanol puts on an engine and the gaskets and everything that this junk goes through to get to the engine.


Even if ethanol condensed from the air with NO COST, E10 would still be a loser. Ethanol, in low concentrations, changes the burn profile of gas so that engines cannot optimize it. The result: mpg goes down by 12-20%. So you burn more gas with E10 ethanol than if you took the ethanol out!

So the EPA has probably checked this and declared me wrong… Nope. It turns out that the EPA doesn’t test E10 . Because Bush Sr. gave the oil companies a waver to add E10 without testing.

We should push the EPA to add E10 (versus pure octane gas) to their testing. It will cost us $250k/yr and we’ll make save $200,000,000k/yr. How many million-bagger investments do you have?


If cornrows were subsidized would cause trouble in the haircare industry?

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