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August 29, 2007

Big Oil, meet Big Alternative Fuels

Posted by Angel Gonzalez at 4:05 PM

With hopes for large profits, the alternative energy industry is moving towards the same condition Big Oil is denounced for: being Big.

Ethanol producer VeraSun Energy is on an acquisition spree that will turn it into the green -- or yellow -- equivalent of huge petroleum refiner Valero Energy Corp., according to a Dow Jones Newswires story that appeared in today's Wall Street Journal. By buying big plants across the country, VeraSun -- the largest dedicated producer of ethanol -- will benefit from economies of scale.

The South Dakota company bought ASAlliances Biofuels in late July for $725 million, potentially giving it 20 percent of the country's ethanol market by 2008, the story says.

Another sign of VeraSun's mass market ambitions: on Tuesday the company opened 20 ethanol fueling stations at Kroger stores in Ohio and Kentucky, the Associated Press says. The pumps will sell a blend consisting of 85 percent ethanol.

Other alternative fuel players are also betting on large scale. Seattle-based Imperium Renewables, which recently inaugurated the largest biodiesel facility in the U.S., plans to build several similarly-sized facilities in places ranging from Hawaii to Argentina.

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