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FORT DODGE, Iowa -- Valero Energy Corp. sees a long future in the ethanol business, according to Executive Director of Media Relations Bill Day. ''This has become an important part of Valero's business,'' Day told the Messenger News newspaper. ''The ethanol has been successful for us.''
Earlier this week, Day visited the Fort Dodge Valero Renewables ethanol plant to launch the annual United Way fundraising campaign for 65 local employees, according to the report. The plant -- one of 10 that Valero currently operates -- is exceeding its intended goals, producing approximately 120 million gallons of ethanol per year rather than the anticipated 110 million gallons.
Day cited equipment added to the plant to make it more efficient, plus new technology that lets the plant run longer between periodic shutdowns for planned maintenance, as reasons for the bonus production. The company's vast resources and willingness to invest bode well for its future success with ethanol, he added. ''Valero is well-positioned to compete in the marketplace because of our size,'' he said. ''We compete with everybody. You have to be able to compete on a global basis in a business like this.''
Valero also has the advantage of a favorable "crush spread," which means the company collects more money for its ethanol than it pays for the corn required to produce it, according to the report. Although corn prices have risen recently, Day said Valero pays more attention to its crush spread than to the base price for corn. The company also expects to continue to see positive demand for ethanol as it is cheaper than gasoline.
In recent months, government officials have discussed ending existing tax credits for ethanol blenders, but Day doesn't see that as a negative for Valero, as the company does not blend ethanol and gasoline.
''The tax credit is good for the industry overall, but we don't get a lot of benefit from it,'' he said. ''It doesn't really factor into our economics.''
In addition to its existing ethanol plants, Valero is building a renewable diesel facility in Louisiana and is looking at the process of producing cellulosic ethanol using wood pulp, according to the report. The company has also discussed potentially developing renewable jet fuel for the Navy.