Monday, October 1, 2007

The Great Ethanol Squeeze

Tim Annett, posting at the WSJ's Energy Roundup, points us to a Journal story:

The ethanol boom may be running out of gas, Lauren Etter and Ilan Brat report. “The price of ethanol has fallen by 30% over the past few months as a glut of the corn-based fuel looms, while the price of ethanol’s primary component, corn, had risen. That is squeezing ethanol companies’ profits and pushing some ethanol plants to the brink of bankruptcy,” they explain. “Some ethanol companies are ‘under deathwatch‘ now, says Chris Groobey, a partner in the project-finance practice of law firm Baker & McKenzie, which has worked with lenders and private-equity funds involved with ethanol.”