Ethanol not back with Rahal team in 2009?
Those terms, normally associated with old-line manufacturing, now are popping up to describe what was seen just three years ago as a sure bet for Indiana: high-tech ethanol plants.
Ethanol producers across the Midwest are being squeezed by falling prices, tight credit, overbuilding and the volatile market for corn. As a result, many have seen their profits shrink and their stock prices fall. Several have slid into bankruptcy and have scrapped deals and projects.
The latest setback came Friday, when Aventine Renewable Energy Holdings, struggling to conserve cash, said it would slow construction of a plant in Mount Vernon, Ind., near the Ohio River, and delay the opening for about nine months. The plant, designed to produce 220 million gallons of ethanol a year, had been scheduled to open early next year.
"The margins in the ethanol business today are not very good. They are near break-even," said company spokesman Les Nelson. "We need to make sure we have liquidity in our business."
The company also said it would suspend construction at a plant in Aurora, Neb., for about six months.
The abrupt reversal raises the question of whether the ethanol industry, once seen as a major force in Indiana's agriculture economy, is just going through a temporary market slump or embarking on a severe downturn.
It also puts a new wrinkle in the national discussion over alternative energy, which took center stage this summer when the price of gasoline soared to more than $4 a gallon.
Now with gas prices less than $2 a gallon, demand for ethanol has fallen. That's even though ethanol pumps have sprouted up across Indiana, from zero three years ago to 116 now. More at Indy Star
11/16/08 Rumor has it that Ethanol will not be back with the Rahal Letterman Racing team in 2009. If true then what does it say for the IRL wrapping so much of its marketing around ethanol? We tried to tell our readers that ethanol was not the way to energy independence in the USA and that prediction has turned true as the ethanol industry is taking a beating and losing money. Consumers simply are not going to use a fuel that gives them 20% less fuel mileage than straight gasoline. The IRL would be wise to incorporate some sort of KERS in their new car/engine formula in 2011 because that is one technology that makes sense and appears to have universal appeal. However, in an effort to keep costs down we doubt they will do it.