Cargill, Inc. announced this week that it's involved in a venture that would more than triple the company's ethanol production. Cargill is one of three owners of a new venture, Demeter Enterprises, which plans to be producing 300 million gallons of ethanol by late 2006 or early 2007. Cargill and Demeter this week announced that the LLC will build three new 100-million gallon plants. They'll be located at Albion, Nebraska, Linden, Indiana and Bloomingburg, Ohio. The facilities will cost approximately $125 million each to construct. No mention was made as to what technology woud be used or who would construct the plants.
Low ethanol prices compared to gasoline are helping build demand for the fuel. Ethanol prices are cheaper than gasoline. Last week spot wholesale prices were running just over $1.50 a gallon for ethanol when gasoline was at about $2.13. Cargill's decision to expand began long before either this summer's cheap ethanol prices or last week's passage an energy bill that would require the nation to use 7.5 billion gallons of renewable fuels by 2012.
Cargill currently produces about 120 million gallons of ethanol a year, in addition to what these new plants would produce.
Cargill has been criticized by some as profiteering and taking the side of big business in ethanol production, rather than keeping it a farmers cooperative industry. While that may be true, ethanol is becoming big business and production plants are becoming larger and more sophisticated which requires leadership by a large organization. Some farm coops, like those in milk, are huge by any standards and could well handle any industry. Somebody has to step up to the plate and take the lead.
Technocrati tags: ethanol, renewable energy, Cargill
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