40 Corn Ethanol Plants Could File For Bankruptcy by Early 2009
by Matthew McDermott, New York, NY 
on 11.19.08
photo: Stefanie Seskin
Two weeks ago, the world’s largest ethanol producer, Verasun, filed for bankruptcy. But that’s just the tip of the iceberg: According to an Omaha, Nebraska investment banker (quoted in the Des Moines Register) the number of ethanol plants filing for bankruptcy could rise from 16 so far this year to as many as 40 by early 2009.
Producers Can't Hedge Against Corn Price Fluctuation
Because of the current financial climate, Mark Lakers of Ag & Food Associates LLC said, most ethanol plants can’t hedge their corn prices anymore and as a result and “there is consolidation coming in ethanol”. Though he added that “Ethanol production will continue of even increase” because he “can’t see a Democratic administration beating up on ethanol.”
For one, I hope the incoming Democratic administration does beat up on ethanol (and Big Corn in general) a bit. Biofuels certainly have their place, but corn ethanol is solidly at the bottom of the pile of good feedstocks, needs to be phased out as quickly as possible and replaced with second generation feedstocks not derived from food crops.
Corn Ethanol
World’s Largest Ethanol Producer, Verasun Energy Corp, Files for Bankruptcy
Corn Ethanol Worsens Gulf of Mexico Dead Zone
Round and Round We Go: Is Corn-Based Ethanol Viable?
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At least Obama doesn't have to work out to phase this stupid stuff, it will sink on its own. We should let the same happen to big irresponsible corporations (some corporations are responsible) and the oil industry; they will either downsize and clean up their act or go down the toilet.
At some point we could potentially have more ethanol plants than we can consume, and then what?
Export it? can't send by pipeline, and shipping over water in a humid environment with a fuel that absorbs water may (or may not) be a disaster as well.
That said, somebody might buy up the equipment cheap and help lower fuel prices (which is both good and bad) or perhaps use the equipment to use a better feedstock for the ethanaol.
A few inconvenient truths:
With the Iowa (corn growing state) primary looming last January, Obama advocated expanding the federal mandate for corn-based ethanol, and Clinton switched her 2005 opposition to mandates to support.
As President of the Senate, Al Gore cast the deciding vote (1994) to develop and subsidize ethanol from corn.
What selective memories people have!