By Stephanie Kelly

NEW YORK, Oct 8 (Reuters)Red River Biorefinery in Grand Forks, North Dakota, came online in April, arguably the worst time for an ethanol facility to begin operating as the coronavirus pandemic sank fuel demand.

Instead of shutting like many ethanol facilities, the company switched focus from producing fuel ethanol to making high-grade alcohol for hand sanitizer, where demand surged during the pandemic as Americans scrambled to protect themselves against the coronavirus.

Red River and several other companies now view the hand sanitizer market as more than a temporary salve for weak fuel demand, making permanent investments in production of high-grade alcohol that meets standards for producing sanitizer.

In recent months Pacific Ethanol PEIX.O, Green Plains GPRE.O and Highwater Ethanol HEOL.PK have said they will boost capacity for high-grade alcohol.

“Our intent when we first went live was to be purely in the fuel market,” said Red River President Keshav Rajpal. “There’s been a huge shift in supply and demand instantaneously. When that happens, in our case margins compared to fuel ethanol are much higher in this space.”

Globally the hand sanitizer market was valued at $2.7 billion in 2019, with North America accounting for a third of the market’s revenue share, according to Grand View Research, a consultancy.

The flurry of announcements indicate some producers see more profitability in hand hygiene because of the pandemic than in transportation fuels. Corn-based fuel ethanol demand tends to track closely to gasoline consumption, as U.S. law requires it to be blended into the fuel.

As of January, U.S. fuel ethanol production capacity totaled 17.4 billion gallons per year, EIA said, up from 2019’s 16.9 billion gallons per year.

Fuel ethanol production nationwide has rebounded from the spring, hitting 923,000 barrels per day from 537,000 bpd in

(Bloomberg) — The world’s electricity, gas and water suppliers have accomplished the improbable feat of striking bigger deals than they did prior to the onset of the year’s slump in mergers and acquisitions.

Loading...

Load Error

This week, Veolia Environnement SA set the stage for what could be a long battle for full control of Suez SA by taking a 29.9% stake in the French water utility for 3.4 billion euros ($4 billion). It was the latest in a flurry of multibillion-dollar transactions that have lifted utilities deal volumes by more than a third this year, according to data compiled by Bloomberg, making it the only major sector tracking above 2019 levels.

Driving the trend has been companies’ desire to cash in on investor demand for stable assets that can deliver sustainable long-term returns, which has been amplified by the pandemic. The broader push toward clean power generation and supply also continues to shape corporate strategy among utilities executives.

“During times of uncertainty, investors are increasingly looking for asset classes that offer safety and stability for their capital,” said Steffen Pleser, Europe, Middle East and Africa head of power, utilities and infrastructure at UBS Group AG. “We are seeing that the utility sector has proven to be even more attractive during this pandemic and expect the level of activity to continue.”

With the prospect of milestone transactions involving NextEra Energy Inc. and Duke Energy Corp. in the U.S. and PPL Corp.’s business in the U.K. still in the offing, the industry could yet see one of its best years since before the financial crisis more than a decade ago. All this as global M&A volumes remain down by more than a fifth because of the coronavirus pandemic.



Lone Riser


© Bloomberg
Lone Riser

Even as the pandemic began to take hold in March,

AUSTIN — Texas collected 6.1% less in sales tax in September than a year earlier, Comptroller Glenn Hegar said Thursday.

Retail trade was a rare bright spot, he said.

The state’s oil and gas sector, though, continued to get hammered. So did all other major sectors except retail.

A pre-pandemic bolstering of sales-tax collections on e-commerce has helped offset what would otherwise be even bigger setbacks to the state’s revenue workhorse, Hegar said.

“The COVID-19 pandemic and low price of crude oil continue to weigh on the Texas economy and sales tax revenue,” he said in a written statement.

In five of six months since the pandemic struck, the state’s sales tax haul is down from 2019. A 4.3% increase in July, based on Gov. Greg Abbott’s full reopening of the economy in June, was the only exception. Otherwise the trend has been down: By 9.3% in April, 13.2% in May, 6.5% in June, 5.6% in August and 6.1% last month.

Texas’ monthly sales-tax haul has slumped again, raising questions about how the state economy is faring amid the coronavirus pandemic. Wrapping up the state fiscal year, Comptroller Glenn Hegar on Tuesday issued revenue numbers that had more down arrows than up arrows.

In July, Hegar announced that what had been expected to be a nearly $3 billion positive end balance in general-purpose revenue for this cycle instead would be at least a $4.6 billion shortfall.

Last week, in his office’s publication “Fiscal Notes,” Hegar explained why prospects for state budget writers when the Legislature meets next year could get better – or even worse.

“COVID-19 is not disappearing,” he said. “We’re going to have to learn how to strike a balance between keeping people safe and allowing the economy to slowly open up. We have to recognize the new norm.”

But “human behavior” is hard to forecast, he said.

“Even when restrictions are lifted or loosened, when will people feel safe going to the movies again? When will they feel comfortable packing into stadiums or attending conferences and conventions? It’s difficult

Co-produced with Long Player

The midstream sector is full of challenges, and the current uncertainties are very tough on this sector. There are many reasons for this which includes a rapidly slowing U.S. oil and gas production which could negatively impact many midstream companies. Therefore, in this sector, income investors are clearly best served by investing in the best company with the best management. Clearly the best-of-breed is Enterprise Products Partners (EPD). We explain later in this report on why EPD is one of the best high-yielding companies to buy and hold for the very long term.

Tax Note: EPD issues a K-1.

Recent Performance

The energy sector remains out of favor by investors. However, during the past several months, EPD has been a leader in the industry. It has strongly outperformed all the energy indexes including Energy Index (XLE) and the midstream index (AMLP) over the short-term and long-term periods. During the past six months, EPD has returned 20% including dividends.

ChartData by YCharts

Importantly for income investors, we are patient. We are happy to collect high income from super solid companies until Mr. Market realizes that this is one of the best companies to buy and hold for the long run.

For investors, the good news is that EPD trades at very cheap valuations. EPD shares still have a long way to go to approach historical valuations while still offering a sustainable and growing 11% yield. The appreciation potential for EPD is very rare for an income type investment. When one also considers that EPD traditionally grows at a decent pace, these shares could offer a retiree that unusual combination of appreciation and growing generous distributions for the foreseeable future.

Long-Term Debt

This company has felt the pressure to lower debt levels as have many competitors