- The Washington Times - Friday, July 29, 2005

FILLMORE, Ind. — Dozens of ethanol plants are being developed across the country as part of a national push toward alternative fuels, and the industry is about to get a major boost from new federal energy legislation that would require refiners to double the use of corn-based ethanol in gasoline to 7.5 billion gallons a year by 2012.

The House passed the energy bill Thursday. The Senate approved the mammoth $12.3 billion legislation yesterday, and the White House said President Bush looks forward to signing it into law.

For Kim Ames, who has weathered good times and bad on the 4,000 acres his family has farmed for three generations in Greencastle, Ind., the energy bill and the $125 million Putnam ethanol plant being built in Cloverdale, about 40 miles west of Indianapolis, could provide a local buyer for half the 300,000 bushels of corn he produces each year.

“I think it’s good,” he said. “We’ve always been exporting our corn somewhere. Now we’ll be doing something (local) with it.”

The bill would lead to about $6 billion in new investment in ethanol plants across the country and generate about 200,000 jobs, said Monte Shaw, a spokesman for the Renewable Fuels Association, an industry trade group.

“It’s going to be good for consumers, good for taxpayers,” he said. “It’s going to be really good for rural communities.”

Proponents say the United States needs to produce more ethanol, a corn-based fuel additive made from distilled grain mash, to reduce its reliance on foreign oil. Oil prices have hovered around $58 a barrel recently, driving up costs for gasoline, airline tickets and other consumer goods.

Ethanol was used in cars in the early 1900s, but mass production of the fuel didn’t begin until the 1970s. In 2004, 81 plants produced about 3.4 billion gallons of ethanol nationwide, according to the Renewable Fuels Association.

Almost 86 percent came from the Midwest, which produces more than two-thirds of the nation’s corn.

Iowa is the nation’s leading ethanol producer, with 16 plants and another 11 in development.

The Iowa Corn Grower’s Association reports that ethanol plants added $16 million in tax revenue to the state and $2.5 billion to local communities.

“It’s added a great deal of value to Iowa’s corn producers,” said Shannon Textor, marketing manager for Iowa Corn, an agricultural trade group.

Ohio has about six ethanol plants in the works, said Bill Teets, a spokesman for the Ohio Department of Development.

“We have made it a priority to work with these companies to try to get them here,” he said.

Indiana, the nation’s fifth-largest corn producer, already has one ethanol plant. New Energy Corp. in South Bend produces more than 100 million gallons a year.

The Putnam County plant, expected to open in August 2006, could produce 72 million gallons a year.

Terry O’Malley, chief executive officer of Putnam Ethanol, said his company plans to build two other ethanol plants in Indiana.

“I think a lot of people want to get on the bandwagon because they feel there’s an opportunity,” Mr. O’Malley said.

Critics question whether that opportunity can be sustained long term.

They say ethanol increases the cost of corn, which in turn means livestock owners pay an average of $3,500 more a year for feed. They also contend that while E85, the gasoline-ethanol mix sold at 400 stations nationwide, costs an average of 30 cents a gallon less than regular gasoline, but it is also less fuel efficient.

“People are saying we need more (ethanol),” said Edward Murphy, director of refining and marketing at the American Petroleum Institute.

“Whether or not that continues in the long term is, I think, politically questionable.”

Recent research by a Cornell University professor says ethanol uses about 30 percent more energy to produce than it puts out.

“It’s an absolute waste,” said David Pimentel, a professor of agricultural sciences. “The only reason we’re doing this is because of politics and big money.”

Mr. Ames, the Indiana farmer, is willing to take his chances.

He said the new ethanol plant means his corn will sell for about 10 cents more a bushel — bringing in an extra $30,000 a year.

“Does $30,000 make or break us? No,” he said. “But does it help? Yeah.”

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