Change we can believe in.................
Oil giants filling up on troubled ethanol plants
When Sunoco closed this week on the acquisition of a bankrupt ethanol plant for pennies on the dollar, it became just the latest oil refiner...
By WILLIAM KATES
The Associated Press
FULTON, N.Y. — When Sunoco closed this week on the acquisition of a bankrupt ethanol plant for pennies on the dollar, it became just the latest oil refiner to step into the alternative-fuels market.
Traditional refiners under pressure to reduce emissions are finding new avenues to meet evolving environmental standards, and finding big bargains along the way.
Sunoco made its initial bid just weeks after Valero Energy, the nation's largest independent oil refiner, became an ethanol plant owner the same way.
"You are going to see this become a trend ... especially with the government wanting to go green," said Daniel Flynn, who follows the renewable-fuels industry for Chicago-based Alaron Trading. "There are a lot of these ethanol plants hanging by a hair. This could be the perfect time for the big companies to step in."
With Sunoco's acquisition this week, major oil refiners control as much as 7 percent of the total industry capacity.
In April, Valero paid $477 million to buy seven large ethanol plants in the Midwest from bankrupt VeraSun Energy, the nation's second-largest producer of ethanol.
Sunoco snapped up the $200 million Northeast Biofuels plant in upstate New York for $8.5 million.
Over the past couple of years, Marathon Oil has acquired large stakes in ethanol plants in Illinois and Ohio, each with more than a million gallons in annual capacity.
Sunoco will spend as much as $20 million to refurbish the plant so it reaches its production capacity of 100 million gallons a year by early 2010.
Sunoco blends about 460 million gallons of ethanol with gasoline each year. The Fulton, N.Y., plant will supply nearly 25 percent of the ethanol Sunoco needs to meet renewable-fuels standards, said spokesman Thomas Golembeski.
The plant is near Sunoco's main operations in the Northeast, where many of its 4,700 gas stations are concentrated, but the shift in U.S. energy policy was a big motivator.
"We also view this as a first step into an area of possible growth for the company," said spokesman Thomas Golembeski.
read more..........
seattletimes.nwsource.com |
