Energy
Biodiesel Refinery Goes on the Block (NSC, BRK-A)
Published:
Last Updated:
Bad news doesn’t surprise anyone any more, especially in the bio-refining business. Shareholder value in ethanol companies has all but evaporated. Now, we get news of a biodiesel plant going on the auction block.
A company called Mid-Atlantic Biodiesel Company, LLC, is being forced to auction its five million gallon/year refinery, which went into operation in 2006. The plant only produced B100 (100% biodiesel), and only did so for about six months. Then the cost of feedstock caught up with Mid-Atlantic, and the company closed its doors. Now, according to the auctioneer’s web site, the plant will go under the gavel on January 22, 2009, in a "lender ordered collateral sale."
The announcement doesn’t identify the lender, but it does say that "therefinery is leased from Norfolk Southern Company" (NYSE:NSC). WarrenBuffett’s Berkshire Hathaway Inc. (NYSE: BRK.A) owns about 1.9million shares in Norfolk Southern, which is only a fraction of the370-million-odd Norfolk Southern shares outstanding. Would there be any way Buffett got involved? Unlikely, unless he thought he was getting to buy something for nothing or that was going to be given government guarantees for years and years.
A biodiesel refinery is almost an order of magnitude cheaper to buildthan a petroleum refinery, so the loss here is probably on the order of$500 million, minus whatever the auction brings in.
Mid-Atlantic’s slogan was "On your table one day, in your fuel thenext. Renewable and recyclable." The plant used vegetable oil, bothused and virgin, as feedstock. Neighboring soybean farmers thoughtthey’d struck it rich. The chairman of Delaware’s Soybean Board gloatedin 2006, "The biodiesel demand continues to grow. The demand is there.We just need to get the supply."
The farmers got what they wanted–higher prices for their soybeans. Unfortunately, they killed the golden goose.
Paul Ausick
December 16, 2008
Is Your Money Earning the Best Possible Rate? (Sponsor)
Let’s face it: If your money is just sitting in a checking account, you’re losing value every single day. With most checking accounts offering little to no interest, the cash you worked so hard to save is gradually being eroded by inflation.
However, by moving that money into a high-yield savings account, you can put your cash to work, growing steadily with little to no effort on your part. In just a few clicks, you can set up a high-yield savings account and start earning interest immediately.
There are plenty of reputable banks and online platforms that offer competitive rates, and many of them come with zero fees and no minimum balance requirements. Click here to see if you’re earning the best possible rate on your money!
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
