Oct. 25--STEAMBOAT ROCK -- Cheaper corn, rising oil prices and smarter business decisions are powering ethanol's road to recovery.

Nearly a year ago, the renewable fuels industry was sputtering. The state's largest ethanol producer at the time, VeraSun Energy Corp., filed for bankruptcy last Halloween and one of the smallest farmer-owned plants, Pine Lake Corn Processors, near Steamboat Rock, followed suit two months later.

Several ethanol plants nationwide were shuttered, construction ground to a halt on others and those that did survive weren't making money. A combination of record-high corn and low ethanol prices crippled the industry.

Corn soared to nearly $8 per bushel during the summer of 2008, and wholesale ethanol plunged to about $1.50 per gallon. The companies that got into serious financial trouble bought too much high-priced corn and didn't sell enough ethanol when it was $3 per gallon to cover expenses.

"We were not able to hedge ethanol along with purchasing corn," said Larry Meints, president of Pine Lake Corn Processors. "We weren't alone."

Today, the economics fueling ethanol's engine is making it purr once again. Local ethanol plants are purchasing corn for a little more than $3.80 per bushel and ethanol is worth almost $2 per gallon.

Plant officials say they're not making money hand over fist, but ethanol is profitable again.

"It's looking better," Meints said. "This is the best crush margins have been in a while."

A bankruptcy court ruling is scheduled for Nov. 18 concerning Pine Lake's reorganization plan. If approved, the plant will emerge from Chapter 11 with Prairie Land Cooperative of Hubbard, its largest creditor, as majority owner.

Officials say the ethanol business has stabilized. That's good news for farmers supplying its chief ingredient, thousands of Iowans employed by the industry and the state's economy.

A study released earlier this year by the Iowa Renewable Fuels Association said ethanol and biodiesel refineries add nearly $12 billion, or about 9 percent, to Iowa's gross domestic product.

"In addition to the rather large current impact, increased demand for renewable fuels would provide a serious boost to Iowa's economy," IRFA Executive Director Monte Shaw said in a prepared statement.

San Antonio-based Valero Energy Corp. says it is bullish about ethanol. North America's largest oil refiner purchased seven former VeraSun plants, including one near Charles City, and one development site from the defunct company.

Valero spokesman Bill Day said all the plants are profitable and, if the right opportunity came along, the company might buy more.