Oregon Tax News
6/15/2009
Pacific Ethanol’s subsidiary that operates the 40 million gallon Boardman ethanol plant was one of five subsidiaries that filed for Chapter 11 bankruptcy recently. Company officials indicated that the plant would continue to operate. The Boardman plant is the only one of Pacific Ethanol’s four corn ethanol plants still operating. Both of Oregon’s large ethanol plants are seeking bankruptcy protection from creditors. Cascade Grain’s 100 million gallon plant in Clatskanie operated briefly in 2008 then filed for Chapter 11 protection in January.
Falling gas prices, increased corn prices along with expansion of ethanol capacity have curtailed the enthusiasm for ethanol not only in Oregon but across the nation.
The number of ethanol plants in the United States doubled between 2004 and 2009. Governments added to the rush by mandating ethanol use with hopes of creating green jobs and decreasing the dependence on foreign oil.
A look at what happened to the corn price shows the problem the ethanol industry is dealing with. In 2006 the price for a bushel of corn averaged $2.01 per bushel. That more than doubled by 2008 averaging $4.45 per bushel. As more ethanol plants came online the price of ethanol fell from $2.49 a gallon to $1.60 a gallon from 2006-2008.
Ethanol is not the only bio-fuel that has fallen on hard times. Imperium Renewables’ 100 million gallon bio-diesel plant in Hoquiam, Washington was recently idled. When it began operating in 2007 it was the largest bio-diesel plant in the U.S. It also fell victim to declining oil prices along with a European tariff on imported bio-diesel.
