Valero Energy, the Oil Refiner, Wins an Auction for 7 Ethanol Plants

Valero Energy, the country’s largest independent refiner, said on Wednesday that it would buy seven ethanol plants from VeraSun Energy for $477 million, giving the biofuel industry a lift at a time when it is suffering from excess production capacity and falling gasoline consumption. VeraSun, the nation’s second-largest ethanol producer after Archer Daniels Midland, filed for Chapter 11 bankruptcy protection last fall. Valero’s purchase signals important new support for a flagging industry from an unexpected quarter. In recent years, refiners have opposed Congressional mandates for refineries to blend increasing amounts of ethanol in gasoline, arguing that it made neither economic nor environmental sense. The Valero purchase of an ethanol plant is the first by a traditional refiner, pumping cash into the industry at a time of tight credit and removing a potent political opponent, at least in part. Bill Day, a spokesman for Valero, said the purchase “represents a cost savings and a recognition on Valero’s part that ethanol is going to be part of the fuel mix going forward.”...NY Times