Meanwhile, shares of VeraSun Energy Corporation, the nation's second-largest ethanol producer, jumped more than 29 percent in their trading debut on Wednesday. But on Thursday, the stock declined 10 percent.
VeraSun operates plants in South Dakota and Iowa, and will use funds from the initial public offering to finance construction of two more corn-based ethanol facilities in the Upper Midwest.
The U.S. biodiesel industry also is enjoying rapid expansion, using soybean oil as its primary feedstock. Currently, the biodiesel industry has 265 million gallons of capacity in place or under construction, and predicts that within 12 to 18 months, 2 billion pounds of soybean oil and other feedstocks will be converted into biodiesel.
Rapid growth aside, some worry the biofuel bubble could be at risk of bursting in the short term. According to a report released this week by Alternative Energy News Source, the U.S. corn ethanol industry likely faces challenges due to corn supply concerns, foreign imports, and increased competition from other feedstocks.
And, experts worry that if crude oil prices decline and feedstock and soybean oil prices rise, the price of biodiesel will be less competitive.