Ethanol market poised for recovery as former Cascade Grain plant plots new future
By Erik Siemers
The former Cascade Grain ethanol plant near Clatskanie is being acquired by Waltham, Mass.-based Global Partners LP for $95 million.
By almost every measure, 2012 was another banner year for U.S. ethanol producers. Every measure but one, anyway.
The industry last year produced a whopping 13.3 billion gallons of ethanol, the second-highest total on record and a remarkable 521 percent increase from what was produced 10 years earlier, according to data from the Renewable Fuels Association in Washington, D.C.
But that 13.3 billion gallons was a 4 percent decline from the 13.9 billion gallons produced a year earlier, marking the first year-over-year drop in U.S. ethanol in 16 years.
Several industry observers, though, see that decline as a one-off, the result of a major Midwest drought that wreaked havoc on the prices and production of corn, ethanol's primary feedstock. They say that the line graph for ethanol production should be moving up again in 2013.
“It’s been a challenging market this past year, but it’s somewhat cyclical,” said Bob Dinneen, CEO of the Renewable Fuels Association. “I think the industry is looking forward to another banner year. We’ve been through 16 years of dramatically increased production.”
Oregon is poised to play a greater role in ethanol's rebound this year.
As I reported in Friday's Portland Business Journal, the state's largest ethanol plant is expected to restart after more than three years sitting dormant. Waltham, Mass.-based fuel marketer Global Partners LP is buying the former Cascade Grain plant in Clatskanie for $95 million from Longview, Wash.-based construction firm JH Kelly.
According to the Renewable Fuels Association, Oregon's 149 million gallons-per-year ethanol production capacity ranks 17th. But unlike most of the 16 states before it, the actual amount of ethanol being produced in Oregon is far less than its capacity. The state is producing just around 41 million gallons per year, just 27 percent of capacity.
If you are commenting using a Facebook account, your profile information may be displayed with your comment depending on your privacy settings. By leaving the 'Post to Facebook' box selected, your comment will be published to your Facebook profile in addition to the space below.