Big ethanol shakeout coming?

As the U.S. tries to free itself from Big Oil’s grip, larger biofuel producers look to stake their claim in a growing business.

NEW YORK (CNNMoney.com) — Get ready: It may still be a fairly new industry, but there’s probably a big shakeout brewing in the fast-growing ethanol business.

The rising cost of raw materials and demand for newer and better technology has Big Ethanol poised to take control of the $23 billion biofuel industry.


In the decades since corn ethanol production began in the United States, a small army of plants has popped up across the national landscape. Most produce around 50 million gallons a year or less, and have survived in Midwest markets where corn is plentiful and demand for flex-fuels sufficient.

But as the industry evolves, corn prices climb and the nation gets much more aggressive in developing biofuels, smaller plants that rely on dated technology stand less of a chance of surviving.

In fact, some operators of plants on the low end of the production scale are already getting jittery about what will happen to them if corn continues to linger around $4 a bushel and the cost to transport ethanol stays high.

CNN