Despite a wave of bankruptcies and canceled or stalled refinery construction, the ethanol industry got some good news this week. But there was especially bad news for one company with financial ties to UC Berkeley and Lawrence Berkeley National Laboratory.
Pacific Ethanol, which is partnered with the federally funded Joint Bioenergy Institute (JBEI) to build a new ethanol refinery, announced Monday that it had been forced to re-state its financial results for the quarter ending Sept. 30 by claiming an additional $14.3 million “impairment charge” on top of a previously reported $26.6 million sum.
Both result from the company’s decision to halt construction of a plant in the Imperial Valley. The new costs come on top of other losses caused by high corn prices, and take the company’s quarterly losses to $69.2 million.
The company had delayed the previously scheduled release of its quarterly statement to recalculate its balance sheet.
While the company had reported a $28,000 profit for the first nine months of 2007, during the same period this year Pacific Ethanol reports losing $112.7 million.
The company’s stock was trading at 62 cents a share Wednesday afternoon, its lowest rate for the past year and well below an all-time high in the $32 range three years ago.
JBEI, which is headed by UC Berkeley/LBNL bioengineer Jay Keasling, is one of two major crops-into-fuel programs now under way under the UC Berkeley banner. Other JBEI partners include other UCB energy labs and UC Davis.
JBEI was funded by a $135 million grant from the federal Department of Energy, and the federal agency has put up $24.3 million for a Pacific Ethanol plant in Oregon that would transform plant fibers—rather than sugars—into ethanol.
The second program is the Energy Biosciences Institute (EBI), a $500 million program based at the lab and the University of Illinois Urbana-Champaign. EBI’s proposed headquarters, the yet-to-be-built Helios Building at the lab, has been placed on hold by the university pending a redesign.
The good news for ethanol producers comes in the form of a new federal regulation which raises the amount of ethanol targeted for use in the American gasoline supply from this year’s 7.76 percent requirement to the 2009 figure of 10.21 percent.
The new requirement will raise ethanol consumption from 9 billion gallons to 11.1 billion.
But the ethanol industry remains in turmoil, with the Des Moines Register reporting Wednesday that at least 16 plants are in various stages of bankputcy proceedings—including five in Ohio, which has the largest concentration of crop-to-fuel facilities.