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The company has 78 employees. As it adds new plants its payroll will expand to more than 200. The company also moved its headquarters to Sacramento from Fresno for several reasons, says Koehler. “It’s more central to our market area,” he adds. “It’s at the political and agricultural heartbeat of the markets we serve, and it’s a place we can attract valuable talent.”

Key to the location of its plants is that they’re close to grain markets and the six oil companies that sell 80 percent of the gasoline in the Western United States. That minimizes transportation costs to buyers. And in California, Pacific Ethanol plants are close to the world’s largest population of dairy cattle between Stockton and Bakersfield. Dairy and beef cattle are a strong market for ethanol manufacturing’s co-product, WDG, or the high-protein “wet distillers grain” fed to livestock.

“The bigger horse race in our minds,” says Koehler, “is to lock up these (plant) sites to create a dominant position in distributing ethanol.”

All of this demonstrates the company management’s bullish view of the market opportunity, and the company is certainly building out its ethanol production infrastructure aggressively. However, it may be too late for main street investors, at least at this stage of the game.

Jim Jordan, a Houston-based market analyst of transportation fuels worldwide, including biodiesel, ethanol and methanol, says the political climate in Washington, D.C. is pointing toward a mandate for more ethanol use by oil companies.

“I don’t think there’s any question that probably over the next two sessions of Congress the (ethanol) mandate will at least double or triple,” says Jordan.

The current law is for annual ethanol consumption to reach 7.5 billion gallons by 2012. This year’s consumption level is just over 5 billion gallons, says Jordan. And with ethanol plants under construction, the capacity will be for 9 billion gallons by the end of next year. The ethanol investment market these days, he says, “is probably in its second phase. It went through a phase when everybody and their brother were investing.”

With the subsequent build-out boom of ethanol plants, he adds, “We’ve seen some (investors) back off. It could be in oversupply until Congress does something to raise the roof.” But the most successful ethanol investors got in “three, four or five years ago.”

Easy Money’s All Gone

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