Fire Earth

Mass die-offs from human impact and planetary response to the assault could occur by early 2016

Anyone For More Biofuels?

Posted by feww on June 28, 2008

The Future of Biofuels: Bleak!

As the 36th levee along the Mississippi River broke flooding another 1,500 hectares of agricultural land and about one hundred homes, the death toll in the Midwest storms and torrential rains topped 24 souls since early June. About 40,000 people were displaced from their homes mostly in Iowa where 83 of 99 counties were declared disaster areas.

Flooding has caused billions of dollars of crop damage destroying several million hectares of corn and soybeans and pushing corn and livestock prices to new record highs.


[A few damaged] Corn plants stand in a field that was flooded by overflowing waters of the Cedar River in Mount Vernon, Iowa June 16, 2008. More storms dumped crop-drowning rains on parts of the U.S. Midwest on Thursday [June 26], threatening strained levees and slowing recovery from a multibillion-dollar flood disaster in the heart of the world’s biggest grain and food exporter. REUTERS/Frank Polich. Image may be subject to copyright. See FEWW Fair Use Notice!

“On Thursday, Chicago Board of Trade corn for July 2009 delivery set another record high at $8.22 a bushel, more than double the 40-year average for corn prices. Corn is the main feed for meat animals, main source for ethanol fuel, and used in hundreds of other food and industrial products.” Reuters reported.

Unsurprisingly, rising corn and soy prices in addition to other factors have reportedly forced up to fifteen U.S. biofuel plants out of business.

“Corn prices are making the feasibility of ethanol plants every day more and more questionable,” said Alex Moglia, president of Moglia Advisors in suburban Chicago, which helps biofuel companies restructure.
About 12 small to midsize biodiesel and ethanol plants have declared bankruptcy since early 2008 including Renova Energy LLC, a company with a partially built 20 million-gallons-per year ethanol plant in Idaho, which declared bankruptcy last week. Ethanex Energy Inc, another midsize company based in Kansas declared bankruptcy in March, said Moglia. “There will be more to follow.”

VeraSun one of the major players announce earlier that it will delay the opening of three ethanol plants with a total capacity of 330 million gpy (gallons per year) due to soaring corn costs. Poet energy, another major player, scrapped plans for a 70 million gpy Minnesota plant in May.

The outlook was not entirely bad, said Todd Alexander, a partner at Chadbourne & Park LLP in New York specializing in energy finance. Biofuel output from plants that survive the current high feedstock prices should continue to be in demand because the U.S. mandates that require the blending of biofuels into gasoline are set to rise in volume year after year.

Clearly, “the majority of ethanol plants are not as happy as they once were,” said Todd Alexander, a partner at Chadbourne & Park LLP in New York specializing in energy finance.

Despite the U.S. mandates that demand the blending of biofuels into gasoline, which are set to rise in volume year after year, the full effect of high corn prices will only be felt once the distilleries current contracts, agreed on at much lower prices, run out and new, skyrocketing prices take effect.

Related Links:

Related News Links:

About these ads

One Response to “Anyone For More Biofuels?”

  1. Douglas Blackwell said

    Quality Information Thanks!

    I have bookmarked your site, if you get a chance please take a look at our site there is some more information you may find useful in our members area!

    Warm Regards,

    Dougie

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

 
Follow

Get every new post delivered to your Inbox.

Join 392 other followers