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Despite Promise, Ethanol Risks Remain High

by Ken Silverstein Despite the promise of ethanol, owners of such plants are likely to receive "deep speculative" ratings from ratings agencies. That's what Standard & Poor's says about the fuel additive, which is "booming" because of favorable market conditions as well as supportive government regulations. Ethanol has been experiencing positive growth. That's because some states have banned MTBE as an octane booster since it has been shown to pollute the groundwater. At the same time, ethanol producers have had the benefit of low corn prices in the last few years, which is the main feedstock for making ethanol. They have furthermore been the beneficiaries of high gasoline prices, which have meant better than anticipated margins. Finally, the fuel additive has received lucrative tax subsidies?something that is expected to continue at least until 2010. "As the industry grows in capacity and tries to find access to capital markets, Standard and Poor's is witnessing an increasing number of developers eager to fund construction of new facilities or expansion of capacity with long-term financing," of 20 years or more, says the report "U.S. Ethanol Industry is Booming, But Risky." The credit ratings agency, however, concludes "that industry dynamics will not allow these […]

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Weekly Clean Energy Roundup:November 24, 2004

News and Events United States and 13 Other Countries Form Methane Energy Partnership Solar “Utilities” and Credit Trades Boost Solar Water Heating Study: Worldwide Use of Solar Thermal Energy Underestimated Wind Power Brings Jobs to Nevada, Utah, Vermont, and Wisconsin Ethanol Fuel Industry on Building Spree in the Midwest American Chemistry Council Honors Energy Efficiency Efforts News and EventsUnited States and 13 Other Countries Form Methane Energy PartnershipThe U.S. Environmental Protection Agency (EPA) announced last week that 13 countries have joined the Methane to Markets Partnership, an international effort to capture methane emissions and convert them into energy. In the United States, the major source of methane emissions is landfill gas, but the partnership also focuses on recovering methane from coal mines and from natural gas and oil systems. Methane to Markets has the potential to reduce net methane emissions by up to 50 million metric tons of carbon equivalent annually by 2015, equivalent to eliminating the carbon emissions from 50 500-megawatt coal-fired power plants. Representatives from Argentina, Australia, Brazil, China, Colombia, India, Italy, Japan, Mexico, Nigeria, Russia, Ukraine, and the United Kingdom joined the United States in signing a document to formally create the Methane to Markets Partnership. See […]

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