Wednesday, April 08, 2009

Biofuels Bloodbath

The stream of ethanol and biodiesel failures seems unending.

Today brought us the news of Aventine's demise:

A couple weeks before that was NOVA BioSource. NOVA probably has the best biodiesel plant in the country - state of the art, multi-feedstock, low cost and scale, but with debt equal to their assets and no working capital, they could not keep the ship afloat.

Before that it was VeraSun, the country's largest independent ethanol producer.

Our friends at have pick-up on this trend with an ongoing series they call "Biofuels Deathwatch." See latest here:

Who will benefit from all of this? Certainly not the investors who piled into biofuels during the boom years from 2005 to 2007. Large Ag, vertically integrated and with a diverse source of revenues, certainly benefits. As does Valero who picked up several of the VeraSun plants on the cheap. And I would guess, some very smart visionary investors will begin picking up these plants at distrissed asset prices and make a princely sum. For now, they all seem to be sitting on the sidelines though, waiting to find the bottom, which shows no sign of having been reached.

The journey continues . . .

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