Wesley Clark, retired general, former presidential candidate and touted as a possible vice presidential running mate for President Barack Obama was recently named co-chairman of Growth Energy which is described as “a new, proactive group committed to the promise of agriculture and growing America’s economy through cleaner, greener energy.” On the surface, I found it interesting that an agribusiness association would choose a retired general as their figurehead. Most of the time, generals find their next career in military related industries. What gives?
In recent months, the financial health of the once fast growing ethanol industry has been challenged. For instance, the second largest ethanol producer Verasun is in bankruptcy proceedings, and several others are operating in the red. To makes matters worse, the industry is quickly approaching the ethanol saturation point at the current 10% gasoline blending cap. One of the recent stated goals of Growth Energy is to increase the blending cap to 15-20%.
Obviously, Wesly Clark was offered this new, high profile position for numerous reasons, such as his credentials and his ties to the legislative body. His marching orders are simple.
- Help move the blending cap from the current 10%, to 15-20%
- Increase the perceived importance of ethanol as a part of national and energy security
- Maintain the current subsidy program in place, which is due for renewal
- Position the industry as one that should not be allowed to fail
These are tall orders coming from an industry that could be desperate. Does Clark have the influence and stature to make it happen? If you’re an investor in the ethanol industry, you can see the desperate hole you’re in - you have to do something. But I’m wondering if Clark can make a difference. From my perspective, he can only maintain the status quo at this point. Is Clark’s position one of offense, but rather one of defense. Time will tell.
Tags: Biofuels, Uncategorized
