Sunday, June 25, 2006

Ethanol: Show Me The Money

Despite a serious question about how much energy it takes to produce ethanol, many companies are rushing to complete plants. Why?

Is it a sense of patriotism? A burning need to do something to help the U.S. of A.? Nope. It's money.

For example, here's a couple of quotes from the NY Times:
The modern-day gold rush is driven by a number of factors: generous government subsidies, surging demand for ethanol as a gasoline supplement, a potent blend of farm-state politics and the prospect of generating more than a 100 percent profit in less than two years.
* * *
As one of the hottest investments around, however, few in farm country want to hear any complaints these days about the risks associated with ethanol. Archer Daniels Midland, the politically connected agricultural processing company in Decatur, Ill., and the industry leader that has been a longstanding champion of transforming corn into a fuel blend, has enjoyed a doubling in its stock price and profits in the last year.

One ethanol producer has already sold shares to the public and two more are planning to do so. And the get-rich-quick atmosphere has drawn in a range of investors, including small farm cooperatives, hedge funds and even Bill Gates.



Don't you just love the new American motto: Greed Conquers All.

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