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 DTN Ethanol Blog
| Ethanol in Other Media |
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 Want to know what media across the country are saying about ethanol today? Read DTN's Ethanol Blog.
Each day DTN's newsroom, led by ethanol reporter Todd Neeley, surveys media outlets across the country and provides summaries of stories. We also offer background and context for the most interesting stories.
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DTN Ethanol Blog |
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October 16, 2008
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October 15, 2008
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October 14, 2008
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October 13, 2008
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October 10, 2008
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October 9, 2008
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October 8, 2008
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October 7, 2008
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October 6, 2008
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October 3, 2008
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October 2, 2008
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October 1, 2008
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October 3, 2008 10/03/08 9:55:12 AM
Oklahoma Ethanol Company Falls Victim to Tight Credit Market
"A planned ethanol plant that moved from Enid to Blackwell has fallen victim to the credit market, officials said. Oklahoma Sustainable Energy and Chaparral Energy first announced intentions to build a plant in Enid, then in April 2007 decided to relocate the plant to Blackwell. Oklahoma Sustainable Energy called the decision to pull out of Enid 'strictly a business decision,' citing better incentives provided by Blackwell," The Enid News said. "The company also returned $250,000 in seed money to the city of Enid. Now, tight market conditions are being blamed for a major partner in the project dropping out. Oklahoma Sustainable Energy LLC said in a letter to investors it isn’t surprising funding is at a standstill with Wall Street in a weakened condition. The cancellation of the plant means the organization will return more than $8 million to investors, many of them Oklahoma farmers who contributed a minimum of $10,000 each hoping the ethanol plant would give them a new market. When the plant was changed from Enid to Blackwell, company sources blamed Enid’s inability to provide infrastructure for the plant. Jon Blankenship, director of the Greater Enid Chamber of Commerce, said this latest announcement is consistent with what is happening in the ethanol industry. Credit and finance issues are critical, in addition to some major trends working against it. 'With high corn prices, for traditional ethanol plants using corn that is a concern,' Blankenship said. There also are uncertainties about ethanol subsidies and prices which have contributed to a down period in the industry. 'Rising interest in other investment in other alternative sources such as wind and solar have also contributed,' he said. Chaparral Energy also is a partner in the proposed $100 million project to build a corn-based ethanol plant. Terry Detrick, president and chairman of Oklahoma Sustainable Energy LLC said the vision from the beginning was to make it an Oklahoma project and he still hopes that can be done. Enid City Manager Eric Benson said he was sorry to see the ethanol plant leave Enid."
(Enid News, Oct. 3, 2008)
DTN: Ethanol companies that have not already started construction on plants will be hard pressed to do so. Even as corn prices have dropped in recent months, some companies have announced plans to cancel their proposed projects. Even those ethanol producers that have built numerous plants with the help of the same financiers for years, have been having trouble getting credit to build corn-based ethanol plants. Cellulosic-ethanol companies need much larger amounts of capital to move to commercialization than what it takes to build a corn-based plant. This makes the completion of those projects somewhat daunting. (Todd Neeley)
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Ethanol Producers Learn Downside of Hedging
"Ethanol companies, including the nation’s second largest producer, are learning some difficult lessons about the downside of commodities hedging. With slim profit margins already weighing on the biofuels industry, VeraSun Energy Corp. this month found itself in a liquidity crisis after locking in at higher-than-market prices for the corn that it turns into fuel," according to the Fort Dodge Messenger in Fort Dodge, Iowa. "After a mid-September announcement of an expected third-quarter loss of $63 million to $103 million, the Sioux Falls-based company tried to raise $20 million in a public offering. VeraSun then said several companies had expressed a 'strategic interest,' a phrase typically associated with buyouts or a substantial sale of assets. Spot corn prices by mid-August slumped below $5 per bushel but in the preceding months, as commodities prices spiked, VeraSun locked into an average per-bushel price of $6.75 to $7 for the quarter. No one from VeraSun’s corporate headquarters was available for comment Tuesday. Denver-based Biofuel Energy Corp. found itself in a similar predicament in August. 'Hedging can be a useful tool for managing risk, but it can hurt as well as help, depending on whether or not the commodity moves in the direction that the company had expected,' said Raymond James analyst Pavel Molchanov. VeraSun’s shares, which had traded as high as $17.75 in the past 52 weeks, slumped 92 percent to $1.33. There are signals that Wall Street anticipates a takeover. On Monday -- a day in which the Dow lost 778 points -- VeraSun’s stock jumped by more than 80 percent to $4. Molchanov said a company would have to be of decent size to take on VeraSun’s assets and debt. He said some possibilities include privately held ethanol producer Poet LLC or agribusiness giants Archer Daniels Midland Co. or Cargill Inc."
(Fort Dodge Messenger, Oct. 3, 2008)
DTN: As corn prices have become more volatile in the past few years, the effectiveness of using hedging on the futures market has lost its edge. Last summer it appeared as if corn prices would go well above $8 a bushel, perhaps as high as $10 or more. As a result, locking in a price of $6.75 to $7 seemed to make good common sense. That was true until the corn price dropped, now hanging around the $5 mark. It's a tough game to play. (Todd Neeley)
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Soufflet's French Ethanol Plant Dogged by Legal Delays
"Construction of an ethanol production plant by France's largest grain trading group Soufflet continues to be held up by legal challenges from local opponents after a year-long delay, the company said on Thursday," according to Forbes. "The first stage of Soufflet's project calls for a 150 million Euro investment (or about $204 million) in order to produce 150,000 tons of ethanol using 560,000 tons of wheat. 'It's going to take some time, we can't say (how long),' Raouml Veit, Soufflet's managing director and project manager for the plant, told Reuters by telephone. After obtaining the necessary planning permits earlier this year, Soufflet has decided to delay construction pending further court appeals by a local association. The legal challenges mean the plant, located in the Aube department of northeast France, will not meet a target launch in early 2009, Veit said."
(Forbes, Oct. 2, 2008)
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Man Injured at Wisconsin Ethanol Plant
An unidentified 22-year-old man was injured in an accident at the Western Wisconsin Energy plant located between Boyceville and Wheeler in Wisconsin, according to the New Richmond News in New Richmond, Wis. According to information from the Dunn County Sheriff's Department the accident happened at around 11:20 a.m. Thursday. Officials say the man was unhooking industrial crane which was on a flat-bed trailer when the accident happened. The man was taken by the Boyceville Ambulance Service to Red Cedar Medical Center in Menomonie.
(River Towns, Oct. 2, 2008)
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Toledo Professors Land $500,000 Grant for Cellulosic Ethanol Research
"Two UT professors are the recipients of a $500,000 grant from the U.S. Department of Energy," the Toledo Free Press in Toledo, Ohio said. "Sasidhar Varanasi, professor of chemical engineering, and Patricia Relue, associate professor of bioengineering, are working to create ethanol for biofuels out of glucose derived from wood, switch grass, corn stalks and leaves. The sugars produced could increase ethanol production by 30 percent or more, according to a news release. Varanasi is also conducting biofuel research with Suganit Systems, a company based in UT’s alternative energy incubator that has three related patents licensed to it."
(Toledo Free Press, Oct. 3, 2008)
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New Sugarcanes to Deliver one-two Energy Punch
"New varieties of sugarcane and other crops adapted to the U.S. Gulf Coast region are being developed for use in making ethanol as a cleaner-burning alternative to gasoline," according to USDA Agricultural Research Service. "Agricultural Research Service scientists, in cooperation with the Louisiana Agricultural Experiment Station and the American Sugar Cane League, USA, have already released three new varieties of 'energy sugarcane.' They're called that because of their high stalk contents of sugar and fiber, which could eventually serve as complementary ethanol feedstocks. Raw-sugar processors now burn the fiber to generate heat that powers stalk-crushing and sugar-crystallization processes, notes Edward Richard, who leads the ARS Sugarcane Research Unit in Houma, La. The extracted sucrose sugar is sold for consumption or converted into ethanol. However, Richard anticipates that biorefineries will use the fiber as well, once technologies for converting cellulose into ethanol become economically feasible."
(USDA Agriculture Research Service, Oct. 2, 2008)
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