Investing in Ethanol – Why and How

Unless you’ve been living under a rock, you’re well aware of the huge push over the last few years towards green energy and alternative fuels.  One of the most promising was biodiesel, but as its limitations began to emerge it quickly faded into memory.  However, today ethanol is making a big rise in the world of alternative fuels and it could be in your best interests to consider investing in ethanol.  Of course, like any other investment you’ll want to learn the ins and outs of the product to determine whether or not it’s worth your money.  Here’s a quick review of the basics behind investing in ethanol

Essentially, ethanol is little more than grain alcohol made from sugar or corn.  One of the reasons that many investors have been taking a long look at investing in ethanol is simply because US law requires that annual production of the stuff reach seven and a half billion gallons by 2012.  That’s almost double the amount being produced right now, so common knowledge suggests that investing in ethanol now will be investing in an industry that is going to grow tremendously over the next few months.  That growth should mean big bucks in the pockets of investors, naturally.

Add to that the fact that already the demand for ethanol is much greater than supplies, and investing in ethanol certainly makes a good deal of sense.  However, there are some who are decrying ethanol as a pipe dream and shouting out that investing in ethanol is a dangerous gamble you shouldn’t take.  That’s largely because it is a costly fuel and that it relies on huge swaths of cornfields in order to be produced in any significant quantity.  But the fact remains that production is continuing to climb skyward, and it is likely to do so for some time.

So is investing in ethanol a good idea for you, then?  The answer is that it depends.  There’s certainly a bit of risk involved with it, but that’s true of any investment opportunity.  The law requiring an increase in production and the huge demand right now suggests that it certainly is worth considering.  Whether or not ethanol will become a dominant fuel source remains to be seen.  But investing in ethanol now could be an opportunity that you shouldn’t pass up, and one that may very well give your portfolio a serious boost at a time when few other opportunities can.

About Richard Wilson