Tuesday, October 05, 2010

BFRE BlueFire Renewables Slammed %18 on Good News?

  • So BFRE is spending $296 million! What is going to drive demand for the product? 
  • Their are alternative fuel companies which are not operating at full capacity now! Does BFRE offer a suitable product at a lower cost of production than their competitors? 
  • I'm just trying to understand how this is a good thing for BlueFire Renewables shareholders.

BlueFire Renewables, Inc. (OTCBB: BFRE),  focused on changing the world's transportation fuel paradigm through the production of renewable fuels from non-food cellulosic wastes, announced that it has finalized and signed an Engineering, Procurement and Construction (EPC) contract for its planned cellulosic ethanol facility in Fulton, MS.  The facility will be engineered and built by Wanzek Construction, Inc., a wholly owned subsidiary of MasTec, Inc. (NYSE: MTZ), for a fixed price of $296 million which includes an approximately $100 million biomass power plant as part of the facility.

Here we see growth in the alternative energy sector, but is it sustainable without federal subsidies? The only way these sorts of alternative fuels are sustainable now is with higher energy costs. We could see continued subsidies for alternative fuels and higher oil prices. It will be interesting to see if this operation fairs better than the flood of struggling companies in the alternatives fuels industry: QTWW, PEIX.

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