Ethanol Investing Decline

Chris GroobeyThe issue of investment and financing for ethanol plants and bio refineries in general was addressed today by Chris Groobey, Baker & McKenzie, LLP. He works on project financing with investors and lenders and mostly in renewable fuels. He painted a pretty bleak picture.

In fact, he says the New York investment community is not interested in biofuels right now. He says they’re tapped out and that ethanol and biodiesel are not of interest to them at all. So with that being said, what’s next? He says there needs to be a combination of making more money from existing plants by co-locating other facilities or finding other sources of income from the same plant. He also thinks there needs to be more and bigger business structures.

He says this means we’re returning to more traditional models of rural development that take a longer term view. He recommends growing local agriculturally skilled management teams with people who understand farm risk.

You can listen to my interview with Chris here:

You can also download the interview using this link (mp3).

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4 thoughts on “Ethanol Investing Decline

  1. Anyone who ever invested in ethanol or biodiesel never did much thinking. When you take a finite supply (food) and try to satisfy an infinite demand (fuel) you have a economic nightmare of spirallimg out of control feedstock prices.

  2. We can grow more food, so it is not a finite supply. We actually grow more food every year. But, oil is a finite supply, so we have to find other sources of fuel to supplement a source that will eventually run out.

  3. Old technology has produced a bad wrap for ethanol…..especially the food-vs-fuel debate. Research Purdue’s new method. It only pulls the starch out of the corn and keeps the remainder in the human food chain. It’s like comparing a model T (old technology) to a Ferrari (new technology).

  4. We either change or we die. It’s that simple. We no longer have the oil supply to meet our needs. The Airlines are facing bankruptcy, the automakers are facing bankruptcy, out entire nation is facing bankruptcy.

    The more oil we use the more it will cost, the more ethanol we make the cheaper it will become.