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Ethanol producers mingle while at Power Show Ohio
By VICKI JOHNSON
Ohio correspondent

COLUMBUS, Ohio — Ohio is joining the Corn Belt’s ever-increasing production of ethanol.

The new plants are good for Ohio corn growers, said Tadd Nicholson, director of programs with the Ohio Corn Growers Assoc. Nicholson spoke during the farm management series at the Power Show Ohio in Columbus Friday.

“Over the past years, the (national) ethanol industry has expanded at a responsible pace,” he said. It didn’t build plants at a pace too fast for the market to keep up and it didn’t lag behind.

“The last few years there have been some large leaps,” he added.

In 2005, there were 86 plants in 20 states that produced 4.3 billion gallons of ethanol, he said, which was a 26 percent increase from 2004.

“Most plants are smack dab in the middle of the Corn Belt,” he said. But Ohio is getting in on the act now.

Liquid Resources in Medina, Ohio, is the only plant currently operating. It produced 4 million gallons last year.

But ground has been broken for three plants and more are in the planning stages. The three under construction are Greater Ohio Ethanol in Allen County, which is building a 50-60 million-gallon capacity plant. And ground was broken Monday by a farmer cooperative for a 15-20-million-gallon plant in Harrison County.

Ground also was broken this month on a 100-million-gallon plant by ASAlliance LLC in Fayette County, a cooperative effort between Cargill and farmers.

Plants near Coshocton and Defiance are in the planning stages, along with an unknown location for Broin Co., the nation’s second-largest producer of ethanol.

“We’re excited to see companies like Cargill and Broin starting to look at Ohio because now we know it’s ‘penciling out,’” he said. “It’s making sense.”

Nicholson said 40 of the nation’s 86 plants are owned by farmers and 85 percent of plants now under construction are farmer owned. “Farmers are going to be the largest producer of ethanol,” he said.

Nicholson said the world will have exhausted the easily accessible sources of oil in the ground by 2010.

“It only stands to reason that it will cost more to find oil and the price will be higher,” he said.

The American people’s aversion to being dependent on foreign oil is one of several factors that have made ethanol production more attractive in the last few years, Nicholson said. According to the Ohio Corn Growers, the United States now imports 62 percent of petroleum needs. At current consumption rates, the Energy Information Administration projects America will import 77 percent of its petroleum by 2025.

Other factors are record oil prices and federal and state financial incentives.

“Things politically are on a pretty good track,” he said.

The Energy Policy Act of 2005, signed into law last summer, is a positive step in the right direction, he said.

“It basically says by 2012 we’re going to double our use (of ethanol),” he said.

Currently under consideration in the Ohio House is House Bill 245, the Biofuels Bill, which would provide grants to retailers to install E85-compatible pumps.

Another incentive included in Ohio’s 2005 state budget was the Ohio Biofuels Retail Incentive Program, which provides $150,000 in grants as a pilot project for future incentives.

In Ohio last year, he said 184 million gallons of ethanol were used in Ohio.

“That’s really without trying at all,” he said. “We’ve done that accidentally.”

Nicholson said two main products are made from ethanol right now. One is a 10 percent additive to gasoline as an oxygenate. The other is E85, a fuel mix of 85 percent ethanol and 15 percent gasoline.

The main use last year was in E10 gas blends, which comprise 38 percent of the gas sold in Ohio. All auto manufacturers approve the 10 percent blend.

“We’ve been promoting the use of ethanol for 15-20 years,” he added.

E85 also is sold in Ohio, but only at six locations statewide. That number has increased in the last two years from only one Hilliard, Ohio, location. The most recent was added in Toledo in September. “We need to have at least 200 in the state,” Nicholson said. He showed a slide of a pump in Minnesota, which offered three grades of ethanol.

“That’s what we’d like to see here,” he said.

The positive aspects of E85 are that it’s high in octane, liquid, domestic and renewable, he said.

However, there is a 5-10 mile per gallon mileage loss in flexible-fuel vehicles.

“We don’t want to hide from that,” he said.

He explained that the engines in flex-fuel vehicles are optimized to operate on gasoline because that’s the most common fuel. But if more E85 were available he said automakers would be more apt to set up engines to run optimally on E85.

Ethanol helps to reduce tailpipe emissions and greenhouse gas emissions that contribute to global warming. Tailpipe carbon monoxide emissions are reduced by as much as 30 percent, volatile organic compounds by 12 percent and toxic emissions by 30 percent.

“We’re getting more efficiency out of a bushel of corn than we ever have,” Nicholson said. “It’s economical. It’s competing head-to-head with gasoline.”

The prices for E85 and gasoline are currently about equal, he said. But last summer the price of E85 was 70 cents per gallon lower.

“Automakers really like this,” he said. “They like to give the consumer more choices.”

He said it doesn’t cost them any more to make a flex-fuel vehicle than a single-fuel vehicle. They’re already doing it.

This farm news was published in the February 1, 2006 issue of Farm World.

2/1/2006