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The Ethanol Paradox: Bad Plans In Good Times
By Mr Ethanol | November 12, 2007
Kansas City Star:
Oil hasn’t hit a hundred dollars a barrel, but it has gotten a lot closer than the first time
I heard the prediction.
Hundred-dollar oil first surfaced in the early 1980s when I was learning how to report on banks in Oklahoma. Oil never got close to that price then, for which several Oklahoma banks paid the ultimate price.
Loans for all sorts of ventures, at least tacitly predicated on $100 oil, turned sour in such numbers that banks failed and sometimes spectacularly so.
The lasting lesson: The worst of loans are made during the best of times.
What strikes me about $100 oil this time isn’t so much the boom in the oil patch. The lesson lies in what is happening to oil’s big new rival, ethanol.
Ethanol’s big adventure peaked in mid-2006. Prices soared and anybody with a pulse planned to build an ethanol facility.
Now those plans are unraveling almost as quickly. Just last month…
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