Vireol shutters ethanol plant due to weak oil

Vireol Bio Energy has ceased production at its 62 million gpy ethanol plant in Hopewell, Virginia, US after the 48% plummet in crude oil prices in the past year dragged gasoline prices down with it and placed a cap on ethanol.

US Federal Standards require petrol producers to blend their final product with 10% ethanol.

EPA’s proposal earlier this year to reduce ethanol consumption targets from statutory levels has threatened to stifle growth, while uncertainty around the programme has rendered the US biofuel industry more dependent on exports.

‘We decided to shutter the plant until the market improves,’ Vireol CEO Peter McGenity says.

Denatured ethanol delivery for September rose 1.7 cents, or 1.2%, to $1.46/gal on the Chicago Board of Trade.

Prices are down 33% in the past year, while corn, used to make ethanol in the US, has risen 2.3%.

Vireol is a so-called destination plant, meaning it’s outside of the corn-rich Midwest.

It buys the majority of its feedstock from the Fort Wayne, Indiana, area, about 650 miles northwest of Hopewell.