Tale of Two Producers: Pacific Ethanol Prepares to Restart Plant, GNH Files For Bankruptcy

(MoneyWatch)  The U.S. ethanol industry continues its economic roller coaster ride as one producer prepares to restart production and another files for bankruptcy. The two announcements provide insight into an industry trying to maneveur in an economy impacted by weak demand for fuel.

Pacific Ethanol announced this week it was preparing to resume production of ethanol at its 60 million gallon per year Idaho facility.

The Sacramento-based company's four ethanol-producing units filed for bankruptcy protection last May after a months-long struggle to secure enough cash to stay in business. The company -- along with a number of biofuel producers -- was hurt by the trifecta of low gasoline prices; higher corn prices and energy costs; and global credit crunch.

But now it appears market conditions have improved enough for the biofuel producer to restart production at least one of its facilities. Pacific Ethanol plans to restart the Magic Valley facility in January, subject to approval by the bankruptcy court, final documentation and other conditions including restocking corn and other raw materials, according to a company statement. The bankruptcy court is expected to consider the restart at Dec. 14 hearing.

Meanwhile, Global Energy Holdings announced it has filed Chapter 11 bankruptcy protection to restructure its operations to move from ethanol production to biomass power, reported the Atlanta Business Chronicle. The Atlanta-based company said in a regulatory filing it plans to focus on landfill gas-to-energy projects.