Ethanol Blog

Pacific Ethanol CEO: Decision not Made on Idling Nebraska Ethanol Plant

Todd Neeley
By  Todd Neeley , DTN Staff Reporter
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Pacific Ethanol has not made a decision about whether to idle its 110-million-gallon plant in Aurora, Nebraska. (DTN file photo)

The chief executive officer of a California-based ethanol company told DTN Thursday his company has made no decision on whether to idle a second ethanol plant in Nebraska.

Citing anonymous sources, Reuters reported earlier this week that Pacific Ethanol is set to idle the 110-million-gallon western facility of its Aurora, Nebraska.

PE's CEO Neil Koehler, however, told DTN a decision has not been made.

"We have not made that decision," Koehler said. "We are continuously evaluating run rates at all of our plants including Aurora."

In December, Pacific Ethanol Vice President Paul Koehler confirmed with DTN that it had idled the 45-million-gallon eastern Aurora plant because of "negative-margin market conditions current in the ethanol industry." As part of that move, PE laid off 26 employees or about one-third of the workforce at the Aurora location.

If the two Aurora plants are idled, Pacific Ethanol will have shut off about 20% of its overall production capacity.

In addition, at the end of December Reuters reported Green Plains Inc. decided to idle its 55-million-gallon ethanol plant in Fergus Falls, Minnesota, because of weak margins.

Weekly ethanol production has continued to outpace blending demand by more than 100,000 barrels per day. In addition, export volumes are not making up the shortfall. Implied gasoline demand was up 53,000 bpd or 0.6% last year through Dec. 14, capping domestic growth in blending.

DTN has reported in recent months, based on our hypothetical 50-million-gallon ethanol plant, that many producers may be experiencing very low and even negative margins as ethanol prices have hit some of their lowest levels in nearly a decade.

Additionally, the EPA was expected to release a proposed rule to allow for year-round E15 sales sometime in February.

Todd Neeley can be reached at todd.neeley@dtn.com

Follow me on Twitter @toddneeleyDTN

(TN)

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