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Valero: ‘Ethanol has been successful for us’

By Staff | Aug 26, 2011

Trucks weigh-in and weigh-out at Valero, near Fort Dodge, Wednesday during a tour of the ethanol plant by Valero executives.

Trucks loaded with corn line up every day at the front gate of the Valero Renewables ethanol plant west of Fort Dodge, while at the opposite end of the facility gallon after gallon of the fuel pours into railroad tank cars.

That’s a process local farmers and plant workers can expect to see for a long time into the future, according to Bill Day, the executive director of media relations for Valero.

“This has become an important part of Valero’s business,” he said Wednesday morning. “The ethanol has been successful for us.”

Day said the San Antonio, Texas-based company can ”bolt on technologies” to expand the plant’s capabilities and ensure it operates in a highly efficient way.

Valero, he added, will be able to remain competitive in the ethanol business thanks to its size and a favorable crush spread, meaning the company is collecting more money for the ethanol than it is paying for the corn.

“We compete with everybody. You have to be able to compete on a global basis in a business like this.” —Bill Day Executive director of media relations

“Valero is well-positioned to compete in the marketplace because of our size,” Day said. “We compete with everybody. You have to be able to compete on a global basis in a business like this.”

Day traveled to the plant with a group of other company leaders who came to launch the annual United Way fund-raising campaign for the 65 local employees.

Those employees operate a plant that churns out more ethanol than its designers envisioned. The plant’s capacity is officially listed at 110 million gallons a year. But according to Day, it’s now producing about 120 million gallons a year. That’s possible, he said, because equipment has been added to make the plant more efficient. New technology also enables the plant to run longer between the times it must be shut down for planned maintenance, he added.

Another fermenter, which will be the eighth one at the plant, is being planned, according to Day.

The price of corn has surged to more than $7 per bushel this month, but Day said Valero managers aren’t necessarily concerned about the base price for that commodity. Instead, they keep a close eye on the crush spread, he said. As long as the company pays less for corn than it takes in from ethanol sales, it will remain profitable, he said.

The demand for ethanol, Day added, remains good because it is cheaper than gasoline.

Presidential candidates and members of Congress have talked about ending tax credits for ethanol blenders. That’s a possibility that doesn’t really concern Valero because it doesn’t blend the fuel, according to Day.

”The tax credit is good for the industry overall, but we don’t get a lot of benefit from it,” he said. ”It doesn’t really factor into our economics.”

Valero, which has 10 ethanol plants and is building a renewable diesel facility in Louisiana, is eying cellulosic ethanol production using wood pulp, according to Day. Company officials are also discussing the potential for making renewable jet fuel for the Navy.

Contact Bill Shea at (515) 573-2141 or bshea@messengernews.net.

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