Ethanol bargains

Oil companies are taking advantage of the slumping economy and government energy policies to move into the ethanol market.

Refiners are forced to do business with the ethanol industry through a government mandate to blend the alternative fuel made from corn into their gas to reduce emissions and reliance on foreign oil.

But ethanol producers have hit hard times. Plants have been idled, and bankrupt ethanol-producing plants are being bought up by leading oil refineries at bargain rates to supply themselves and other refiners.

Sunoco recently purchased the closed Northeast Biofuels Plant in Fulton with plans to reopen it after a $20 million investment. It is a logical investment since the plant can supply about a quarter of the 460 million gallons of ethanol with gas every year.

And ethanol demand will rise in the future as federal mandates take effect boosting the use of corn ethanol to 36 billion gallons by 2022. Oil companies are counting on federal policies to ensure more demand, keep their plants operating and give them a return on their investment.