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Rush To Build Ethanol Plants Loses Its Steam
By Mr Ethanol | November 20, 2007
MLive:
Local ethanol producers are delaying or canceling new projects as they endure hits ranging from tighter margins to rising construction costs.
Alternative Energy Sources Inc. said earlier this year that it would open three plants in 2008. Now, the Kansas City-based public company plans to open two corn-based ethanol plants in 2009 if it gets financing early next year, according to a Nov. 14 filing with the Securities and Exchange Commission. The company will seek financing for a third plant after construction has begun on the first two.
Basehor-based Ethanex Energy Inc. also had planned to open three specialized ethanol plants in 2008, but it now has 2 scheduled to come online in 2009. COO Bryan Sherbacow said a joint venture for one project was terminated; the timeline on the other two was lengthened by contract delays and financial conditions.
Part of what’s shaken the industry is simple supply and demand, said Brian Cahill, an executive vice president of Atchison-based MGP Ingredients Inc.
The ethanol industry has doubled its fuel-production capacity in the past two years, causing ethanol prices since then to drop by more than half. At the same time, the spike in demand for corn has more than doubled the price of the commodity.
U.S. Energy Services, which has energy management and development contracts with 125 ethanol plants, is in a prime position to see the changes in the market. Of the plant projects that have engaged the company but have not yet started construction, more than half have been put on hold, and, of those, about a third have been canceled. Story continues…
Topics: Agriculture, Ethanol, Industry, News |
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