Ethanol Makers Losing Money Due to Hurricane Ike Damage and Rising Corn Prices

Nick Chambers — Mon, 22 Sep 2008 17:46:36 +0000

U.S. ethanol producers are being hit by a one-two punch: Hurricane Ike-related damage is softening demand for the alternative fuel while rising corn prices are increasing operating costs.

Last week, Hurricane Ike left many US oil refineries hobbled in its wake — including the nation’s largest biodiesel refinery. As a result, oil production is down.

Demand for ethanol in the US is closely tied to oil production because of the federal ethanol-gasoline blending mandate. So as oil production has fallen, so has ethanol demand.

At the same time as Hurricane Ike was downing oil refineries, corn futures — essentially the betting on whether or not the price of corn will rise or fall in the coming months — have risen dramatically due to the volatile financial markets and a general upward trend.

Hurricane Ike Hobbles US’ Biggest Biodiesel Producer

Nick Chambers — Tue, 16 Sep 2008 23:31:03 +0000

Texas biodiesel producer GreenHunter Energy says that hurricane damage to its gulf coast refinery — currently the largest in the nation — will take it out of production for 6 to 8 weeks.

The GreenHunter facility is capable of producing 100 million gallons of biodiesel per year (Mgy) using a combination of animal fats and vegetable oils. Prior to Hurricane Ike, they had been ramping up production and last Friday announced that they had achieved a 65 Mgy output. It’s unclear how the hurricane damage will affect their time frame for reaching full capacity.

Green Options » Hurricane Damage

Ethanol Makers Losing Money Due to Hurricane Ike Damage and Rising Corn Prices

U.S. ethanol producers are being hit by a one-two punch: Hurricane Ike-related damage is softening demand for the alternative fuel while rising corn prices are increasing operating costs.

Hurricane Ike Hobbles US’ Biggest Biodiesel Producer

Texas biodiesel producer GreenHunter Energy says that hurricane damage to its gulf coast refinery — currently the largest in the nation — will take it out of production for 6 to 8 weeks.