Another ethanol producer files Chapter 11
Pacific Ethanol the latest victim of slumping market
By Dave Hannon -- Purchasing, 5/20/2009 2:33:00 PM EDT
The Pacific Ethanol subsidiary that operates its four ethanol plants filed bankruptcy this week in an effort to restructure its growing debt. Technically the company itself did not file Chapter 11. But the subsidiary that operates the four plants did and defaulted on about $250 million in debt.
Pacific Ethanol operates ethanol plants in Madera and Stockton, Calif; Boardman, Ore.; and Burley, Idaho. In January, Purchasing.com reported that Pacific had temporarily idled its Madera, Calif. plant which produces more than 114,000 gallons of ethanol a day, due to slumping demand.
Pacific Ethanol joins a growing list of ethanol producers that have filed bankruptcy in recent months, including Aventine, VeraSun, Renew Energy, Cascade Grain Products, and Northern Biofuels. Rick Kment, a commodities analyst at the DTN commodities news service this week tells the Sacramento Bee that with ethanol prices at $1.70/gallon, producers face a 30¢/gallon loss. Purchasing.com has reported that ethanol prices this month increased to $1.59/lb because of higher energy costs, increased corn prices, reduced production and stronger demand from makers of sanitizers and other cleaning products.
See also: Ethanol supply chain continues to morph
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