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dan45mcc

Valero buys Indiana ethanol plant

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Valero is at it again.. now owns 11 Ethanol Plants..  around 8% of all Ethanol Plants in the US

 

 

 

 

 

MOUNT VERNON, Indiana. (AP) — An energy company says it will start hiring immediately for about 60 jobs at an ethanol plant on the Ohio River.
 
San Antonio-based Valero Renewable Fuels announced Friday it has purchased the 110-million gallon plant at the Port of Indiana-Mount Vernon from Aventine Renewable Energy. Pekin, Ill.-based Aventine idled the plant in March 2012.
 
Valero spokesman Bill Day tells the Evansville Courier & Pressthe company expects to have the Mount Vernon plant operating within a few months.
 
A spokeswoman for the state port about 20 miles west of Evansville says resuming operations there will create opportunities for area farmers and transportation companies.
 
Valero Renewable Fuels now owns 11 ethanol plants in seven states, including one in Linden, Ind., about 40 miles northwest of Indianapolis.
 
 
 

 

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Although I don't like the idea of ANY oil company taking over the ethanol industry...  <10% is not a controlling share, so I'm not too worried. 

 

My main concern is that they are not looking at investing in the plant to...

1.  promote a long term alternative fuel to ween us off of oil dependency (would be counter to their primary business)

2.  promote the growth of jobs and investment in rural America (they are "big money" from Texas for cripes sake...)

3.  invest in new technology that will take the industry over the long term to a new and even more productive level.

 

I would believe that their purpose is simply to...

1.  Reduce dependency on "outside suppliers" of a major blendstock.

2.  Increase the amount of control that they have over the supply and price of said blend stock.

3.  Any other "long term" anti-competitive conspiracy theories that we are all to well  versed on... this is simply "step one"

 

On this line of reasoning, you could say the same thing about many "ethanol" companies, ADM and Cargil come to mind.  These large agribusiness companies see ethanol as simply a short term investment strategy to diversify their portfolio.  Many investors (and administration) in these companies are NOT rural America small town folk... they are financial folks from New York, Chicago ect that are just as guilty as Valero of being involved in the ethanol industry for less than pure long term reasons.

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agree on that fear.  This is why at the current 8% I'm not necessarily alarmed...  If they continue to purchase more plants, and this is faster then the ethanol industry is growing (adding new plants, mostly through new technology/feedstocks...), leading to 8% becoming 10%, becoming 13%... THEN I'll start to get more upset, and then I would like to see some level of ethanol industry involvement for them to agree NOT to sell to competing interests such as oil.

 

We all know (or should) the history of big oil and ethanol... Standard Oil back in the 30s took out ethanol, and salted the earth behind them to prevent any future regrowth of the industry from it's ashes.  We do need to be cautious of this, but at 8%, their strangle hold of the industry is not that significant.  Any attempts they would have would only lead in increased demand for the rest of the industry, which would only encourage more to enter the industry... which would be counter productive for Valero.

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I'm actually looking at this as possibly a move by Valero to be able to offer ethanol blends (including e10) cheaper than their competitors..

 

The Future is clear ethanol blending is the Law and instead of buying on the open market why not just own your own ethanol plants 

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Seeing as how I have absolutely no ties to Valero (and really don't understand much about them at all, to be honest), I can't say for sure one way or another what their ultimate goal is here. I wouldn't be naive enough to believe that they recognize that fossil fuels won't be around forever and they're embracing a "fuel of the future". The way my safety manager had put it to me, Valero bought several of these plants following the 2008 economic crash, for pennies on the dollar after the closed due to bankruptcy. Whatever their ultimate goal, that was an incredibly smart financial decision on their part.

 

I was told that our ethanol plant was almost bought out by Valero (thank goodness it wasn't)!

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