Poet Shelves Ethanol Pipeline Plans on Lack of Federal Aid
January 20, 2012, 1:38 PM ESTBy Mario Parker
(Updates with CEO comment in third paragraph.)
Jan. 20 (Bloomberg) -- Poet LLC, the largest U.S. ethanol producer, said it’s shelved plans for a pipeline to deliver the fuel because it doesn’t expect to get federal help.
The company, based in Sioux Falls, South Dakota, intended to explore the feasibility of a $3.5 billion pipeline in partnership with Magellan Midstream Partners LP, Poet said today in an e-mailed statement.
‘We continue to believe that the pipeline is a viable project with tremendous benefits for the country,” Chief Executive Officer Jeff Broin said in the statement. “But with little prospects for a federal loan guarantee in the near future, we are currently focused on other efforts.”
Most ethanol is produced in the corn-rich Midwest and shipped to other markets by rail, truck or barge. The additive hasn’t normally been transported by pipeline because it tends to collect water and corrode pipes.
Magellan pulled from the project early last year, Poet said in the statement.
Poet said that financing a venture of the size planned would require federal loan guarantees.
--Editors: Charlotte Porter, Richard Stubbe
To contact the reporter on this story: Mario Parker in Chicago at mparker22@bloomberg.net.
To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net
