Combustible Corn

Ethanol production considered
answer to rising gas prices

Number of facilities growing nationwide,
including many right here in Indiana

By Konnie McCollum
Staff Writer

February 2007 Indiana Edition Cover

February 2007
Indiana Edition Cover

(February 2007) – Anyone who has filled up at the gas pumps in recent days has noticed an amazing trend – gas prices are dropping for the first time in years.
In late January, gas prices had fallen to under $2 a gallon for regular unleaded, nearly $1 less than prices last summer when some stations charged more than $3 a gallon.
“The drop in prices is directly related to the increase in ethanol and other biofuels production throughout the nation,” said Indiana USDA Rural Development Cooperative Specialist Jerry Hay of Deputy, Ind. Simply put, when prices for foreign crude oil skyrocketed, renewable energy sources became a more attractive alternative, and production of these readily available American-made fuels increased dramatically, Hay explained.
“As long as foreign entities keep crude prices high, ethanol production is competitive. When gas prices were at $1 gallon, there was no incentive in this country to find other energy sources,” said Hay.
Indiana, already the largest producer of soybean-based biodeisel fuel in the nation, has jumped on the bandwagon for ethanol production. Ethanol, which can be mixed with gasoline to decrease the amount of crude oil needed to fuel vehicles, is made from corn, a product in abundance in Indiana.
Ethanol is an alcohol product produced by yeast from sugars. Regular field corn is put through a fermentation process and is turned into 200-proof denatured ethanol. Even the by-products of the process can be reused, including as animal feed. Fuel ethanol can be used alone, such as the fuel used in Indy Racing League cars, or can be blended with gasoline and used as fuel.

Ethanol Production in the United States:

• The U.S. ethanol industry is the fastest growing energy industry in the world.
• Ethanol is blended in 30 percent of the nation’s gasoline.
• As of August 2006, the United States had 1001 plants in operation and with a capacity of 4.8 billion gallons per year. Thirty-nine biorefineries are under construction and seven are expanding that will add more than 2.5 billion gallons of capacity when complete.
• Ethanol is blended in 40 percent of the nation’s gasoline supply.
• According to the U.S. Department of Agriculture, ethanol yields 1.64 units of energy for each unit of energy it took to produce. That compares to just 0.8 units of energy from gasoline.
• The use of 4 billion gallons of ethanol in 2005 reduced greenhouse gas emissions by 7.8 tons, the equivalent of taking 1.2 million cars off American roads.
Source: Kansas Ethanol Association

All cars and trucks on the road today can use gasoline-ethanol blends of up to 10 percent ethanol, and any car built in the 1990s or later can be converted to run on higher ethanol blends for around $300, according to Hay. He said the more ethanol we use in the fuel blends, the more our country saves on expensive crude oil.
The gasoline-ethanol blend of up to 10 percent is also called E10, and most consumers in Indiana already use this type of fuel. Blends of up to 85 percent ethanol, also known as E85, are available in vehicles with slight modifications. These vehicles are called “flexible fuel” vehicles.
At this point, most of the ethanol plants are located in the northern part of the state. There are 20 processing plants already producing ethanol, with five more scheduled to be operational this year, according to Hay. Although southern Indiana has been slower to take advantage of this new economic opportunity, there are signs that the region is poised to enter the ethanol production market.
A Harrison County, Ind., group, the Harrison County Independent Business Alliance last year acquired a small scale ethanol plant to use as a demonstration model to educate community and business leaders, investors and farmers about the economics of ethanol production.
Steve Boehman, owner of the Fun Farm Recreation Park where the plant is located, said the purpose of the project was to show how ethanol production in this area could benefit everyone.
“There is just an enormous economic multiplier with this situation,” he said. “From the farmers who grow the crops to those who will produce the fuel to the average person who buys gasoline – everyone benefits.”
He said the goal is to make locally-owned, full-scale production of ethanol and bio-diesel a reality in southern Indiana. “Producing renewable energy fuels, such as ethanol, stops us from being held hostage by foreign countries for fuel,” he said. “The more fuel we produce in our own country, the less dependent we are on foreign governments who set the prices to benefit themselves.”

From Corn to Ethanol Char

Last year, the model plant produced four batches of fuel and is expected to produce more this year.
In the meantime, a new company, National Resource Enterprises Inc., has been formed to build the actual full-scale production plant in Harrison County. A site for the new plant has not been selected yet; the company is still looking into financial equity, which will include investors and possibly government grant money.
NRE’s Larry Ott said, “Once the equity gets in place, the plant could become fully operational in 14 to 18 months.”
Ott said the economic development impact on a community with an ethanol plant is tremendous. “The plant could provide as much as $53 million a year to the local economy,” he said. The plant itself could add at least 35 high-paying jobs to a rural community, with about 280 additional jobs in support as well.
Ott also said if the United States could replace 20 percent of the crude oil bought from foreign governments with renewable biofuels, such as ethanol, the country could put $50 billion back into the U.S. economy. That kind of money would impact every citizen in this country somehow, he said.

Missouri Ethanol Plant

Photos provided

Ethanol plants like this in Missouri
are springing up all over Indiana. Most
of those operating in Indiana are
located in the northern part of the
state, but ethanol production is growing
in many areas of the country,
including southern Indiana.

Farmers across the state, and the nation as a whole, stand to benefit dramatically from ethanol production, these proponents say. In 2005, more than 13 percent of U.S. corn production went toward making ethanol fuel. Approximately 11 billion bushes of corn were produced in the United States during that year. Indiana produced 889 million bushels of corn. Ethanol production in the nation topped 4 billion gallons and consumed 1.4 billion bushels of corn, worth about $2.9 billion. Corn for ethanol production was the third largest demand for U.S. corn.
With additional construction of ethanol plants and increasing demand, fuel ethanol production should top 7.5 billion gallons by the year 2012, according to USDA statistics. The increase in demand for corn means more money for the farmers producing the corn.
While fuel ethanol production has substantial impact on the rural economy and agricultural production, there are many environmental benefits as well. According to recent government statistics, the use of 4 billion gallons of ethanol in 2005 reduced greenhouse gas emissions by 7.8 tons, which is the equivalent of taking 1.2 million cars off American roads.
“Our environment is cleaner,” said Hay.
He said even Madison Consolidated School Corp. has become involved in the renewable fuels industry. Last year, the school corporation used a 20 percent soy-diesel mixture. The mixture helped decrease the harmful effects of the by product given off by the diesel fuel.
Although Hay said there may never be an ethanol processing plant in Jefferson County, Ind., area residents will definitely see the benefits, particularly at the pump.

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