Another One Bites the Dust -- Now It's Ethanol

Page 3, as I mentioned yesterday is the second most important news page in the WSJ.

There is one article on that page today; it takes up the entire page except for an ad by Warren Buffett for his NetJets.

Link here to Ethanol's Long Boom Stalls.

Dateline: Walhalla, North Dakota.

For years, the biggest employer in this city of 1,000 people near the Canadian border was the ethanol plant on County Road 9, which pumped out the corn-based fuel additive to satisfy demand driven by federal mandates requiring its use in gasoline.

In April, plant owner Archer Daniels Midland Co. closed it, citing lackluster returns. The plant's 61 employees lost their jobs, and Walhalla lost its biggest source of tax revenue.

America's ethanol boom is stalling, and the effects are starting to spread across a Farm Belt that had grown accustomed to soaring growth. Annual U.S. production of ethanol more than tripled from 2005 to 2011, driving up crop prices and pumping money into rural communities from Nebraska to North Dakota.

Now, ethanol demand is topping out. The amount used in gasoline is near federal mandates, and gasoline consumption is declining. After 15 straight years of growth, ethanol production this year will fall slightly and will be roughly flat next year, according to the U.S. Energy Information Administration's May forecast. Updated output numbers will be released Tuesday.

Something tells me we won't be seeing this story on the nightly news tonight. Or any time in the near future.

Even with federal mandates, the numbers don't work. Same with solar. Same with wind.

[Again, that doesn't mean investors cannot do well in renewable energy. I am invested in solar. But at the macro level, the numbers don't add up.]