Ethanol Future Bright Despite VeraSun Bankruptcy
November 2, 2008, 9:56 PM
South Dakota Senator John Thune says he's hopeful VeraSun Energy will emerge a stronger company after filing for Chapter 11 bankruptcy.
The Sioux Falls-based company says the move was voluntary in order to maintain business as usual. But what does this mean for the future of ethanol?
While the economy continues to fluctuate, one of the benefits for consumers has been lower gas prices. But those savings are part of the reason for VeraSun Energy's bankruptcy.
"The price of ethanol, it's been very much undervalued in the market relative to gasoline here lately," said Sen. John Thune (R). " And that's partly because there isn't a big enough market for it and that's something we need to be working on as a matter of public policy."
Senator Thune is one of the biggest proponents of ethanol. He says he believes the current economic situation doesn't allow consumers to invest in alternative energies.
"Most of these things, it's economics," said Thune. "And right now, we got a lot of production, a lot of supply and we got a limited or finite demand. And what we need to do is expand the demand and when we do, I think we'll see ethanol more rightly valued and the situation will start to correct itself."
So what's the first step toward making sure ethanol is part of the future? Thune believes current ethanol blends need to be more readily available.
"We don't have enough E-85 pumps," said Thune. "They're only 1,100 filling stations out of 180,000 that offer E-85. We need to have more flex-fuel vehicles coming off the assembly lines and we're working on legislation that would make that happen."
Although the legislative process may take time, Thune believes VeraSun will rebound and the demand for ethanol will grow.
"I think the future of ethanol is very bright," said Thune. "I think we're experiencing a speed bump in the road that will correct itself over time."
And consumers hope the correction makes the rest of their drive as smooth as possible.
The bankruptcy court filing in Delaware indicates VeraSun has a debt of nearly $2 billion.
VeraSun has 16 operations in South Dakota, North Dakota, Nebraska, Minnesota, Iowa, Michigan, Indiana and Ohio.
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