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Argument: Cellulosic ethanol start-ups are mostly failing

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Robert Bryce. "The Cellulosic Ethanol Mirage: Verenium and Aventine Are Circling the Drain." Energy Tribune. Mar. 30, 2009: "I wrote about the myriad problems of cellulosic ethanol in my book, Gusher of Lies. But the hype over the fuel continues unabated. And it continues even though two of the most prominent cellulosic ethanol companies in the U.S., Aventine Renewable Energy Holdings and Verenium Corporation, are teetering on the edge of bankruptcy. As noted last week by Robert Rapier on his R-Squared Energy blog, Verenium’s auditor, Ernst & Young, recently expressed concern about the company’s ability to continue as a going concern and Aventine was recently delisted from the New York Stock Exchange. On March 16, the accounting firm Ernst & Young said Verenium may be forced to “curtail or cease operations” if it cannot raise additional capital. And in a filing with the Securities and Exchange Commission, the company’s management said “We continue to experience losses from operations, and we may not be able to fund our operations and continue as a going concern.” Last week, the company’s stock was trading at $0.36 per share. It has traded for as much as $4.13 over the past year. Aventine’s stock isn’t doing much better. Earlier this month, the company announced that it may seek bankruptcy protection if it cannot raise additional cash. Last Friday, Aventine’s shares were selling for $0.09. Over the past year, those shares have sold for as much as $7.86. The looming collapse of the cellulosic ethanol producers deserves more than passing notice for this reason: cellulosic ethanol – which has never been produced in commercial quantities -- has been relentlessly hyped over the past few years by a panoply of politicians and promoters."

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