Bill doesn't sell diesel fuel for "a penny or two" under the market--he has exceptionally high quality diesel and prefers to store it if the temporary spot price isn't right (as he has done in Charleston, where he refused Allied's offer to buy at a slightly below market price all he could produce--other potential local takers include oil-burning utility companies and fuel distributers who would blend it with lower-quality fuels in order to make the latter a more marketable product). He believes in having at least two buyers at a given location so he is never subject to potential manipulation by being beholden to a particular contractor. My own projection of a likely scenario is that there will eventually be two or three longer-term contracts at a given site to take care of the majority of production, with the balance above that sold on the spot market. The latter is, of course, highly volatile, having ranged (in the New York market, at least, from the low $0.50s to the high $0.70s during the past 12 months). There are projections for next winter of both a rising oil glut (hence the falling oil futures prices) and a diesel shortage, based on limited production capacity versus strongly rising demand. Anybody with clairvoyance on these matters should get in touch with Bill immediately (I'd like to hear from you, too, on an options investment strategy).
With regard to GRNO's long range effect on diesel prices, I wrote earlier that if GRNO succeeding in processing 80% of the waste oil in the US, it would produce at most about 1.5% of the total US diesel demand. So GRNO's strategy should be to take advantage of what happens in the market, since they will not be able to affect significantly what _is_ the market.
I think that the employment of Woessner is great news--clear evidence that the business strategy is on pace, and that production will be developing rapidly, since he will be able to devote his total attention to those issues. His employment also should begin to lessen anxiety about key employee catastrophies.
=+=+=Norm |
