Valero again idles Nebraska ethanol plant

Source: By MATT OLBERDING / Lincoln Journal Star • Posted: Thursday, November 1, 2012

Valero Corp. has again idled its ethanol plant in Albion.

Company spokesman Bill Day said operations at the plant were shut down recently because low margins mean it can’t make ethanol profitably right now.

The company had idled the plant in June because of the high cost of corn. It restarted the plant in mid-September after corn prices fell off all-time highs.

Corn prices are about the same now as when Valero restarted the plant, but Day said margins have not improved.

Falling gasoline prices as well as falling demand could be playing a role. The average price of gasoline has fallen about 26 cents a gallon nationwide in the past month and about 44 cents a gallon in Nebraska.

The most recent Energy Department data show ethanol production in the United States has fallen 17 percent this year to 801,000 barrels a day; however inventories remain higher than at the same time last year.

In addition to the Albion plant, Valero idled a plant in Indiana and also said in a conference call with reporters Tuesday that three other of its plants are operating at reduced capacity.

Also Tuesday, Valero reported that the ethanol segment of its business lost $73 million in the third quarter, compared with a profit of $107 million during the same period in 2011.

Day said Valero planned to restart the Albion plant when margins improved. However, the plant could wind up being shuttered until spring regardless of how the market performs.

Even when the plant is idled, it restarts a day or two every month to keep active the enzymes used in production. That process is much harder during the winter, so Day said that, depending on the weather, Valero may have to make a decision soon on whether to restart the plant or leave it shut down for the winter.