Tuesday, October 30, 2007

Will Ethanol Pick Up with $100 Barrel Oil?

Ethanol production has slowed down as rising corn prices and falling per gallon ethanol pricing has occured. But crude oil is hitting all time highs this week and this will surely get investors talking about the need for more domestic fuel supplies. Right now though it appears as many ethanol plant plans are on hold.

A Denver-based energy company has delayed plans to build more ethanol production facilities amid an industrywide supply glut.

BioFuel Energy Corp., which went public in June, is building two Midwestern ethanol plants. But it has decided to hold off for now on plans to construct others, including one in Alta, Iowa.

"Ultimately, I'm confident we'll build those plants," said David Kornder, chief financial officer. "It's going to be a viable business."

By the numbers

121 ethanol plants exist nationwide.

84 plants are in the works.

92.9 million acres of corn were planted this year, the most since World War II and 19 percent more than last year.

7 billion gallons of ethanol are projected to be produced this year, up from 6.3 billion gallons in 2006.

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