http://www.joe-duarte.com/saved_news...market_IQ.html
"Ethanol: The Glut Has Arrived
Too Much Too Soon?
Anyone who bought shares of Pacific Ethanol (Nasdaq: PEIX) in November 2006 has received an 80% loss of their investment, and the reason seems to be that there is too much of the stuff just sitting around.
Ethanol was supposed to be the answer to the U.S. gasoline problem. But so far, after a huge bump in the early part of 2006, it has turned into a major bust.
According to the New York Times "companies and farm cooperatives have built so many distilleries so quickly that the ethanol market is suddenly plagued by a glut, in part because the means to distribute it have not kept pace. The average national ethanol price on the spot market has plunged 30 percent since May, with the decline escalating sharply in the last few weeks."
The distribution story should come as no surprise, given the fact that ethanol cannot be moved along conventional pipelines due to its proclivity to leak through the normal infrastructure that transports oil, gasoline, and other fuels.
The same thing is true of other storage facilities such as the traditional tanks that are buried under gas stations.
One professor, Neil E. Harl, an economics professor emeritus at Iowa State University who lectures on ethanol and is a consultant for producers, told the New York Times that the ethanol boom may be over, and that this is a "dangerous" time for investors."