Oil Buys Ethanol

Ethanol production has become something of a soap opera. The obvious up-side is that it has the potential to free us from energy dependence on potential enemies and opens up a huge revenue stream for farmers. The counter argument is that ethanol takes food out of the mouths of our livestock and our people. In fact, a year ago Valero Energy CEO Bill Klesse said using corn to produce ethanol would make food so expensive in poor countries it would cause more misery than global warming. Now the nation’s largest oil refiner has made a bid to take control of several corn-based ethanol plants. The second largest U.S. ethanol producer filed for bankruptcy protection in October and is looking to sell all of its 16 plants.

Jeff Broin - CEO of ethanol producer POET - sees the positives of this development. “I’ve been in this industry for more than 20 years. And quite frankly, oil has been fighting us every step of the way during that time. We have literally been fought on every piece of legislation by big oil. To see them starting to understand some of the benefits of our industry and make an investment is a big positive for the long term.”

That is particularly true now that there are alternatives to corn for producing ethanol. We have recently reported on the use of bio-mass materials such as corn cobs, wood chips, all un-edible organic plant waste to produce ethanol.