By Adam Gaub
Casa Grande Dispatch
One of Maricopa’s largest employers has laid off the majority of its employees and halted production.
Ken Dickey, owner of the Pinal Energy ethanol plant, said Friday that his company had to lay off the bulk of its workforce at the end of 2012 and completely halt production, taking its facility to what is known as a “cold idle” after going to a “hot idle” in July.
The move, Dickey said, was forced upon the company by the condition of the ethanol market.
“There’s an oversupply of ethanol,” said Dickey, saying the industry had overbuilt since 2007 — the year Pinal Energy began operations. “There’s a billion gallons of excess capacity out there.”
Dickey said temporary closures or reduced production has been the norm at ethanol plants across the country in recent months as the American market for gasoline has held steady in recent years, meaning the average 10 percent of ethanol blended into each gallon of fuel wasn’t able to increase with greater fuel consumption.
Pinal Energy General Manager Keith Kor told Ethanol Producer magazine in June that corn prices also played a large role in the company’s going into a holding pattern to wait for market conditions to improve.
“With the old crop corn being tight, the basis to get the corn here to Arizona costs more. That’s a squeeze on the margins,” Kor told EP. “Depending on what new crop corn looks like, that’s just kind of the big factor.”
In June, Pinal Energy had kept on the bulk of its workers while in the hot idle phase, using them to perform general maintenance tasks at the facility. When it became clear the market was not going to improve in the near-term, Dickey said the decision was made to go to cold idle and let most of the workers go.
