Investing in Biofuels Feeds Renewable Energy Commitment

CHS Inc., a grain-based foods and supply company, acquired about 28 percent ownership in US BioEnergy Corporation, an ethanol production and marketing firm. CHS has sold ethanol-blended fuels for more than 25 years and currently supplies blended fuel products at 500 million gallons annually, through 64 terminals.

“By working with an established company, CHS becomes actively involved in the renewable fuels manufacturing arena more quickly and on a broader basis than it could have on its own,” said John Johnson, CHS president and CEO. “This is a sound strategy for our grain and energy portfolio and our member-owners, in keeping with CHS goals to be a diversified, financially strong organization.” “This relationship, along with the additional capital, positions US BioEnergy to expand our presence in the ethanol industry,” said Gordon Ommen, President and CEO of US BioEnergy. “By increasing production of ethanol, a clean-burning alternative fuel source, we decrease our dependence on foreign oil and increase our dependence on our Midwest farmers.” US BioEnergy has two ethanol plants under construction, US Bio Albert City, a 100-million gallons/year (mgy) plant in Iowa and US Bio Superior Corn, a 45-mgy plant near Lake Odessa, Michigan. In addition, US Bio Janesville, a 100-mgy plant in Minnesota, is under development and other projects are being considered. Also, US BioEnergy’s subsidiary UBE, provides ethanol and dried distiller grains marketing and/or management services for 11 operating plants and six currently under construction. Today 91 ethanol plants across the U.S. produce 4 billion gallons of ethanol annually. The Renewable Fuels Standard included in the recent federal Energy Bill mandates that by 2012 ethanol and biodiesel production will reach a minimum 7.5 billion gallons annually.
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