This is a combination of news about a couple of biofuel companies and expounding on what I think is a really good idea. Let’s start with the news and then I will attempt to expound. GS Agrifuels and Global Ethanol have announced a joint venture to built a biodiesel refinery in Iowa. The feedstock of the 30 million gallon-per-year plant will be crude corn oil produced at Global Ethanol’s two ethanol plants at Lakota, Iowa and Riga, Michigan.
GS Agrifuels has developed technology for extraction of oil from corn and Global Ethanol certainly uses a lot of corn. GS Agrifuels will be responsible for the financing of the corn oil extraction technology at the two ethanol plants as well as the financing of the new biodiesel plant in Lakota. Global Ethanol will manage the plant and market all of the product produced.
For investors: GS Agrifuels is a subsidiary of Greenshift, stock symbol: GSHF. In my opinion, after a brief cruise around the investor info on their website, this company has some serious issues financially, so do your homework if this is an investment that interests you. The “good” news is you can buy 100,000 shares for $400, but my online brokerage adds a penny a share for stocks under $2 so an investment would need a 50% rise to break even.
Back to the biodiesel from corn oil idea: Last week VeraSun Energy VSE announced during their third quarter conference call that they will start producing corn oil in 2009. After reading about the deal outlined here, I realized this could be a great thing for ethanol producers. Ethanol companies have had a very rough six months as ethanol prices have fallen and corn prices risen. If these companies become sources of biodiesel or biodiesel feedstock as well as ethanol producers they will generate additional renewable energy from the same raw material; corn.
Quite a few analysts have decided other feed stocks are more appropriate for ethanol production, however, corn is what Midwest farmers grow and they are good at it. The ability to generate additional fuel in the form of biodiesel from corn will give it an advantage over single product feed stocks. I grew up in the Midwest and come from a farming family, so I am for something that will be good news for corn farmers.
Source: Cleantech.com
Photo: Iowa Farmer Today Corn Cam
This article is not a recommendation to buy or sell any securities.
