Saturday, October 31, 2015

Random Note On Dividends; Random Note On New Ethanol Plant In Iowa -- October 31, 2015

Update on dividends. I think everyone has wondered when the majro oil companies would start cutting dividends. Finally, a major oil company is cutting its dividend and by a huge amount: from 21 cents to 5 cents a share -- Marathon (MRO) announced the cut. On the other hand:
Exxon Mobil Corp., the world’s biggest oil explorer, declared a quarterly dividend on Wednesday that will raise the 2015 payout for the 33rd straight year.
Within hours of Exxon’s announcement, Chevron Corp. disclosed a payout that will boost its annual remittance for a 28th straight year.
Oil producers as diverse as Britain’s BP Plc, Norway’s Statoil ASA, and ConocoPhillips and Occidental Petroleum Corp. of the U.S. are following the same track, maintaining or lifting dividends while curtailing other investments. Dividends have been viewed as sacrosanct because yield-hungry investors rely on oil stocks to generate income.
It really is quite impressive: in 2010, XOM paid 44 cents quarterly; the company is currently paying 73 cents.

Ethanol Production

Note: in reply to the reader who sent me this story, I correct my reply. I mid-read; this ethanol plant is producing ethanol for feedstock for a purpose other than fuel

A reader sent me this story from Forbes:
  • DuPont, the chemicals company based in Wilmington, Del., has begun operations at one of the world’s first commercial-scale advanced biorefineries in central Iowa.
  • The $225 million plant produces cellulosic ethanol from corn husks – the non-kernel parts of corn plants.
  • The cellulosic ethanol plant is designed to produce 30 million gallons of fuel-grade ethanol annually but is not expected to operate at full capacity until 2016. The core biofuels technology involved is a bacteria similar to what is used to distill tequila. DuPont has inked a deal to sell the cellulosic ethanol produced at the plant to Procter & Gamble, which plans to use it to make laundry detergent.
Note: this is not the part of the corn husk we eat

However, not knowing anything about ethanol plants, I was curious how this compared with plants that use corn.

Remember the Torrington, WY, plant we talked about earlier this year. That plant used 3.5 million bushes of corn or about 90,000 dry tons. Considered relatively inefficient, it produced 12 million gallons annually. 12 million gallons / 90,000 dry tons = 134 gallons / ton.

The DuPont plant in Iowa: 375,000 dry tons to produce 30 million gallons of ethanol. 30 million gallons / 375,000 dry tons = 80 gallons / ton.

This compares to two other new cellulosic ethanol plants, one in Emmetsburg, IA (20 million gallons of celluosic ethanol annually) and the ohter in Hugoton, KS (25 million gallons of cellulosic ethanol annually).

I am way beyond my comfort zone here; my numbers and calculations may be way off. If this is important to you, go to the source and do your own math.

By the way, that Torrington, WY, plant mentioned above? It is closing; it was found to be not economically feasible once the state tax credit expired. Whatever.

Notes to the Granddaughters

Dots to connect some day:
  • Birdman, the movie
  • "What We Talk About When We Talk About Love" -- Raymond Carver
  • Diotima
  • Socrates
  • Plato's The Symposium
  • The Waves, Virginia Woolf

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