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Investors Fill Up with Ethanol

posted on March 3, 2006


The Senate Judiciary Committee on Thursday took up discussion of tightening U.S. borders against illegal immigration. Committee Chairman Arlen Specter, a Republican from Pennsylvania, says he hopes his committee could have a bill ready by the end of March. The balance will be to tighten borders without hindering the Hispanic labor force much of agriculture depends upon. There's another balancing act Washington is working on this week: How to allow increased production of alternative fuels when some of the production methods cause air pollution. The answer came on Wednesday, when the Environmental Protection Agency announced a proposal to allow the threshold for corn milling plants to emit up to 250 tons of air pollutants per year. Currently, the plants can emit 100 tons of pollutants annually before triggering tougher restrictions on production. Environmentalists responded that the rule could 'create a new problem by trying to solve an old one.' Nevertheless, investors increasingly are entering the alternative fuels market – especially since the President stated his desire for less dependency upon foreign oil.

Investors Fill Up with Ethanol

President Bush: 'By applying the talent and technology of America, this country can dramatically improve our environment, move beyond a petroleum-based economy and make our dependence on Middle Eastern oil a thing of the past.'

 

The president's call for ending the nation's dependence on foreign oil has touched off a wave of new investment in alternative energy ventures ... but triggered new concerns in farm country over ownership of the booming corn ethanol industry.

Wall Street investors looking for a quick score caused stock prices s in ethanol and other alternative energies to fluctuate wildly following the president's speech. One new stock index tracking 18 companies engaged in alternative energy shot up 17 percent in January before falling back.

The surge in outside investment, including foreign investment, is making farmers and policymakers nervous. In Iowa, where nearly half of the 27 ethanol plants are farmer-owned, some agricultural groups have called for state legislation to limit foreign ownership in the ethanol industry.

Republican Senator Charles Grassley, commenting on the proposed sale of 60 percent interest in an Iowa ethanol plant to an Australian company, this week urged farmers not to approve the sale.

The boom in construction of new plants is seen as critical to economic development in much of rural America. But the shift in investment has had an impact.

Nationwide, only six of the 42 new ethanol plants under construction are farmer-owned.

Critics of the Bush administration's energy policy point out that the White House is quick to tout alternative energy sources, but just as quick to say there's no government money available to spur development and provide incentives.

Sen. Barack Obama, D-Illinois: 'His funding for renewable fuels is at the same level last the day he took office. He refuses to call for even a modest increase in efficiency standards for cars and trucks. His latest budget funds less than half the budget the energy bill he himself signed into law, leaving hundreds of millions of dollars in underfunded energy proposals.'


Tags: agriculture biofuels corn ethanol industry investing news oil renewable fuels