This is not the time to be betting on first-generation biofuels. Add up the increasing cost of feedstocks and an overall tough economy and it's no great surprise that "going yellow," as it were, is not the easy path that some made it seem a year or so ago. The reality is hitting home. According to Reuters, about a dozen biofuel plants across the U.S. have filed for bankruptcy protection thanks to corn shooting up to $8 a bushel and ethanol's "miserable profit margins." The affected plants are mostly small or mid-sized facilities, a biofuels expert told Reuters, and he said he expected more to announce bankruptcy soon.

On top of the financial problems, many ethanol plants are only operating at 50 percent capacity and previously-announced plants are being stalled or stopped completely. Who knows how much longer blending E85 into gasoline at the pump will be a way to save a few bucks.

[Source: Reuters]

In recent years America's beleaguered farmers have seen some welcome relief in the form of growing demand for corn to produce ethanol. As new ethanol production plants have popped up they have created new jobs, but it hasn't all been rosy. Everyone wants more ethanol plants, just Not In My Back Yard (NIMBY). People have begun to push back against plans to build new plants in their communities (actually, ethanol NIMBYism is nothing new).

Setting up facilities like the one pictured above in small rural towns can cause a significant increase in traffic and noise. The plants also bring new emissions that some residents fear could taint other local products and produce a rather nasty smell. There is also the not insignificant issue of water demand (see exampes #1, #2, and #3). Producing ethanol from corn consumes a lot of water. That's water that the local residents need for their own use not to mention irrigation for their crops. It looks like the honeymoon may be over for corn ethanol. The cellulosic ethanol developers better get cracking.

Related:

• ABG visits 50 million gallon per year ethanol plant - Video

[Source: International Herald Tribune]