What happens when an industry grows too quickly?
Rush to build ethanol plants loses its steam
Monday, November 19, 2007
Suzanna Stagemeyer - Kansas City Business Journal
Local ethanol producers are delaying or canceling new projects as they endure hits ranging from tighter margins to rising construction costs.
Alternative Energy Sources Inc. said earlier this year that it would open three plants in 2008. Now, the Kansas City-based public company plans to open two corn-based ethanol plants in 2009 if it gets financing early next year, according to a Nov. 14 filing with the Securities and Exchange Commission. The company will seek...(complete article here).
The article places the blame for the ethanol "slow-down" on supply and demand. Those are always good things to blame in a capitalistic economy such as ours is supposed to be. However, it takes the author to the next-to-last line to hit upon the real underlying issue that is currently dogging the industry -- the infrastructure. Until we can get the ethanol to where it needs to be in an efficient manner there will be problems. Our country's fuel infrastucture is built around the oil and gas industry. It will require additional infrastructure investment to accomodate the ethanol industry.
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