September 30, 2009

Ethanol proves to be a positive for oil company

"Ethanol is growing, and it will definitely be part of the mix going forward." -- Gene Edwards, Valero Energy Corp. executive vice president for corporate development and strategic planning, in the Grand Island Independent.

While it is no secret that buying bankrupt Verasun has been good for the oil refining giant Valero, it is nice to see the company acknowledge such in print. The Independent's article, in fact, includes several good quotes and information from Valero about the ethanol industry.

At an event in Albion, Neb., Valero spokesman Bill Day told reporter Mark Coddington (@markcoddington on Twitter): "Right now, ethanol's been one of the bright spots in the system. We've been pleased with its profitability."

The ethanol plant in Albion is one of seven that Valero bought at an auction in April from VeraSun. It's safe to say the $477 million the company paid for all seven plants and a site to be developed later was a bargain -- about one-third of the cost to build new. Yet the bargain price allowed Valero to get the plants up to capacity quickly, which means buying a corn and selling ethanol and distillers grains -- and providing a lot of jobs.

As the article explains, ethanol helps diversify Valero's revenues, helping to balance out its business.

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