TOPIC 'Bioenergy' on Dec 09, 2008 (CET)
Lack of Financing Turns Ethanol Into Nightmares for U.S. Midwest Small Towns
What once looked like “the” solution to a renewable fuel source “and” farmers’ economic struggles is now turning into just one more hardship to bear. As of January 2008, more than 139 ethanol plants were operating in the U.S. and more than 60 new sites were being planned for construction of ethanol refineries. The current rocky financial situation has caused at least 27 ethanol plants to either close or halt current construction efforts.
Rural America is made up of small town farming communities. The possibility of planting more corn crops to meet a rising demand for ethanol production was seen as a saving grace for many farms suffering from low crop prices and rising expenditures. Now, however, other renewable energy alternatives are proving to be more effective than ethanol and banks are more hesitant to loan money for any reason.
One such small town, San Pierre, Indiana, was all set to begin construction of an ethanol plant in the spring of 2009. This town has a population of only 156; small towns like this one are the heart and backbone of the United States. The project has now been cancelled due to banks’ cutting off financing for the plant. No financial institution will save the San Pierre ethanol plant, or, it seems, the town.
Likewise, similar scenarios are playing out in Royal, Illinois; Melrose, Minnesota; Belle Fourche, South Dakota; Blairstown, Iowa; and Mead, Nebraska. The Gateway Ethanol Plant in Pratt, Kansas was in operation for approximately six months before financing for it came to a halt, which led to its eventual filing for bankruptcy.
Ethanol advocates say this is only a small bump in the road to a successful biofuels industry. Others say they may turn their attention to crop waste, forest and wood waste/by-products, and yard clippings (biomass) for biofuel potential. In any event, current financing is hard to come by for ethanol plants.
Sherry Irvin
on behalf of the
BascoTec Internet Limited
Technologie Park 13
33100 Paderborn
Germany
