Ethanol: Industry Consolidation

Seeking Alpha
by: Zacks.com May 28, 2009
By Jon Kolb

Following a period of optimism in the burgeoning ethanol industry and renewed interest in clean, green renewable energy and energy independence in the U.S., the rapid introduction of new ethanol plants is expected to continue its current phase of bankruptcies and consolidation.

So far in 2009, ten ethanol production plants filed bankruptcy, including those operated by Aventine Renewable Energy (AVRNQ) and Pacific Ethanol (PEIX).

The failures of the ethanol business model were primarily caused by the combination of high corn prices and declining prices of oil and gasoline.

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