Colorado’s expected ethanol boom hasn’t come
DENVER, Colorado ” Colorado’s ethanol industry hasn’t sprouted as quickly as industry observers forecast two years ago, but the state’s five ethanol production facilities are doing well despite the shuttering of plants in other parts of the country.
“Colorado plants have been doing a good job of risk management,” said Dave Vander Griend, chief executive of energy company ICM, of Colwich, Kan. “All are running and making ends meet.”
Nearly two dozen ethanol plants have shut down across the nation, according to a story published Wednesday by the Rocky Mountain News.
In Yuma County, only one of two ethanol plants touted in 2006 have opened. Dallas-based Panda Ethanol announced it would build a $120 million plant that would produce 115 million gallons of ethanol a year. Construction on that plant has not started.
Vander Griend told the newspaper that his company had 40 ethanol plants in the works two years ago. Now, the company has no immediate plans to build any new plants.
Investors have also taken note. On Wednesday, shares of Denver-based BioFuel Energy Corp., an ethanol company that went public in June 2007 and built two plants in the Midwest, traded at 35 cents a share, down from its 52-week high of $7.75 a share.
Colorado produces about 130 million gallons a year of ethanol, coming from a state corn supply of 1.34 million acres.
Energy industry observers don’t expect the industry to rebound soon. Plunging oil prices make ethanol less attractive as a fuel source, and there are questions in the industry about how the administration of President-elect Barack Obama will approach incentives for ethanol production.
Some existing plants, such as Yuma Ethanol, are delivering on promises of providing a market for local farmers’ corn and a boost to the local economy. Yuma has a contract for 50 million gallons per year.
“Yuma Ethanol has been good for me,” farmer George Steward said. Steward invested in Yuma Ethanol and said his return has outperformed Wall Street.
Hope remains for a still-experimental alternative fuel made not from corn but from organic waste such as wood waste or corn stalks. Government mandates call for more cellulosic ethanol production because it does not drive up the price of food.
Next year, Broomfield-based Range Fuels will open a cellulosic ethanol plant near Soperton, Ga.
And Vancouver-based Lignol Energy Corp. has announced it will put a cellulosic ethanol plant in Grand Junction in the hope of converting beetle-kill and other wood residues into motor fuel.