ECOLEAF:: Ethanol a Renewable Bionergy
Ethanol is a renewable energy and can be used in place of gasoline (in full or in part) to reduce transportation green house gas emissions. It may also be used in electricity production.
The ethanol industry, however, has fallen on hard times. Due to an oversupply of product, falling market prices per gallon, and fluctuating corn prices, many ethanol-producing companies have been forced to file for bankruptcy protection. In 2005, 4.3 billion gallons of ethanol were produced from 95 refineries. Due to tax incentives, government initiatives, and speculative investors, ethanol production ramped up faster than expected—by 2009, more than 193 refineries were able to produce 12.4 billion gallons. That upward spike became a plunge when supply exceeded demand and blended gasoline/ethanol prices fell. The industry is, in short, in a tailspin. With at least 2.7 billion gallons of capacity idled and more than eight companies filing for bankruptcy, it may be a while before the industry resets itself.
4.3 Billion Gallons of Capacity – 95 U.S. Refineries – 2005
7.9 Billion Gallons of Capacity – 139 U.S. Refineries – 2007
12.4 Billion Gallons of Capacity – 193 U.S. Refineries – 2009
The ethanol industry will recover in short order as supplies begin to come in line with the federal targets detailed in the Renewable Fuel Standard. Under the U.S. Energy Independence and Security Act of 2007, 10.5 billion gallons of ethanol will be produced in 2009. These will be followed by 12 billion in 2010 and 15 billion in 2012. Although the U.S. has already met its production capacity goals through 2010, supply standards may not have yet been fulfilled.
Companies feeling the pinch include the companies like VeraSun—it filed for bankruptcy in 2008. VeraSun had agreed to fixed-bushel prices of $7 per bushel when prices were higher; when prices took a nosedive, however, it was forced to continue paying premium prices. Those premium prices eroded its profits. VeraSun had 1.14 billion gallons of capacity before filing and idling 12 of its 16 production facilities. Six of its plants were then purchased by AgStar.
NOTE: According to the Institute of Agriculture Trade and Policy, it takes 4.2 gallons of water to make one gallon of ethanol. This means that a single barrel of ethanol—or 42 gallons—requires 176.4 gallons of water.
ETHANOL COMPANIES in Bankruptcy
Aventine Renewable Energy Holdings Inc. (207)
Cascade Grain Products LLD
Gateway Ethanol LLC
Greater Ohio Ethanol
Northeast Biofuels (114)
Renew Energy LLC (130)
Verasun Energy (1,140)
White Energy (260)
Wyoming Ethanol LLC
ETHANOL COMPANIES not in Bankruptcy
Abengoa Bioenergy (1,070)
Absolute Energy, LLC
Archer Daniels Midland Co.
Blue Fire Ethanol Fuels Inc.
Heartland Corn Products
New Energy Corp.
Pacific Ethanol Inc.
Tate & Lyle
Chief Executive Ron Miller, CEO, Aventine Renewable Energy Holdings Inc.
Raymond Defenbaugh. CEO, Big River Resources
John Rice, Executive Vice President, Archer Daniels Midland Co.
Ross McCracken, Editor, Platts Energy Economist
Sander Cohan, Analyst, Energy Security Analysis Inc.
Lisa Jackson, Administrator, Environmental Protection
Tom Vilsack, U.S. Agriculture Secretary
Steven Chu, U.S. Energy Secretary
Bob Dineen, CEO, Renewable Fuels Association
Colin South, President, Mascoma Corporation
ORGANIZATIONS, AGENCIES, and LABORATORIES
Renewable Fuels Association
Institute of Agriculture Trade and Policy
Environmental Protection Agency (E.P.A.)
U.S. Department of Agriculture (USDA)
Illinois Corn Growers Association
Biotechnology Industry Organization
American Sugarbeet Growers Association
Red River Valley Sugarbeet Growers Association
California Environmental Policy Council
Lawrence Livermore Laboratory
National Resources Defense Council (NRDC)
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