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The ethanol boom is running out of gas as corn prices spike. (http://money.cnn.com/2008/02/27/magazines/fortune/ethanol.fortune/index.htm?postversion=2008022811)

http://www.cleanmpg.com/photos/data/501/Corn_for_Ethanol1.jpgJon Birger - Fortune - Feb. 28, 2008

Ethanol plants are barely profitable if at all. With Dec. Corn currently running at $5.64 per Bushel, there is going to be a shakeout. On the plus side, Corn farmers are still printing money. -- Ed.

NEW YORK -- Cargill announces it's scrapping plans for a $200 million ethanol plant near Topeka, Kan. A judge approves the bankruptcy sale of an unfinished ethanol plant in Canton, Ill.. And that was just Tuesday.
Indeed, plans for as many as 50 new ethanol plants have been shelved in recent months, as Wall Street pulls back from the sector, says Paul Ho, a Credit Suisse investment banker specializing in alternative energy. Financing for new ethanol plants, Ho says, "has been shut down."

How can the ethanol industry be slumping only two months after Congress passed an energy bill most experts consider a biofuels boon? The answer is runaway corn prices.

Spurred by an ethanol plant construction binge, corn prices have gone stratospheric, soaring from below $2 a bushel in 2006 to over $5.25 a bushel today. As a result, it's become difficult for ethanol plants to make a healthy profit, even with oil at $100 a barrel.

Just look at Verasun (VSE). In the third quarter of 2007, Verasun's gross profit margin shrank from 37% to 12%, as its corn costs rose from $2.05 a bushel to $3.32 a bushel. And, remember, corn prices today are 60% higher than they were back then (whereas wholesale ethanol prices are up only 30%.) … http://money.cnn.com/2008/02/27/magazines/fortune/ethanol.fortune/index.htm?postversion=2008022811

The sooner the corn-ethanol madness is over, the better.

There is no silver bullet for our fuel challenges. Gas at its current prices is still cheap because oil is cheap and easy to get for now.

I look forward to some day many years from now if I even live that long... for all of our energy to come more directly from renewable sources... if they want to use plants to collect the solar energy as bio-fuels instead of using solar electric or solar thermal power from the sun... that is fine with me... fossil fuels are just very old solar energy ...

As I understand it, today's ethanol production is nothing compared to what has been planned in the Energy Bill, so it looks like there is already a problem.

Among other problems is US humanitarian food aid is being cut. :(

The sooner the corn-ethanol madness is over, the better.

My sentiments exactly.

This whole ethanol foolishness is the direct result of lobbyists having their way in Washington, D. C. It's a disgrace.

Harry

As I understand it, today's ethanol production is nothing compared to what has been planned in the Energy Bill, so it looks like there is already a problem.



:mad:

Not only is the price of gasoline rising, $3.40/gallon today in Rochester, NY, but our grocery bills are increasing faster than the price of gasoline.

Who wins, besides Archer Daniels Midland?

The US mandate for ethanol is mind-boggling corruption and idiocy on a biblical scale.

Harry

Sheesh! I can't believe it took them this long to do the math...actually I don't think they've yet done the math, they just realized they can't afford the corn and will have to shut down.:mad:

I see this as supply vs demand at work. I think this will just push more development into other bio-based fuel stocks. Corn is a part of the puzzle and may get pushed aside for other technologies that are more efficient. However it has paved the way for this progress.

The problem is that our genius lawmakers will have to admit they are wrong to push corn ethanol so much, and will have to change the new law!

How long will it take them to do that?

Harry