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Ethanol: The Promise (Part 1 of 2)

Wednesday, August 27, 2003 at 11:44 AM

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Prices at the pump are way up this week. Since the blackout, the cost of a gallon of regular gas in Ohio has been as high as a $1.83 a gallon. Alternative fuels have long been discussed. But have never mounted a serious challenge to gasoline. Perhaps ethanol has come the closest. Many farmers, politicians and business leaders say ethanol shows great promise for the state's struggling economy. About half of Ohio's gas stations already put ethanol in their gasoline. That makes the state one of the top consumers of ethanol, but not a drop is produced in Ohio. ideastream's Mike West reports.

Since ancient times, man has turned corn and other vegetables into alcohol, or ethanol. But until the machine age it was mainly for recreational purposes. Ethanol first came to the public’s attention during the oil shortages of the 70’s. It was promoted as a method of cutting U.S. dependence on foreign oil. But the gasoline supply eventually stabilized and the collective memory of gas lines faded. But some people never forgot.

Joe Logan: The world when we look at it today has a couple of unsustainable syndromes. One is our reliance on petroleum fuels. The resources are dwindling so that is not a sustainable situation.

Joe Logan is the president of the Ohio Farmer’s Union. Today he’s plowing land at his Ashtabula farm.

Joe Logan: The other unsustainable situation is the agricultural production in Ohio and in the nation. Actually, we live in the most agriculturally productive nation the world has ever seen and as the result of that, the prices of agricultural commodities have dropped to (a) dreadful place. In fact, the price of corn and soy beans on the open market is less than (the) cost for farmers to produce them.

The Farmer’s Union is pushing political leaders to do more to help build ethanol plants. The corn belt states of Illinois, Iowa and Minnesota have taken the lead as the top producers. Governor Bob Taft also wants Ohio to catch up. Recently passed development programs now allow the state to pay for the construction of ethanol processing facilities, as well as offering job creation tax credits and other incentives.

Bob Taft: We’ve got ethanol plants all around us and that stuff is being imported into Ohio. That’s not right for our farmers, for our economy. We need to produce the ethanol right here, so I hope we can get at least a couple plants off the ground in the next year or two.

There has probably never been a better time for Ohio to get into the ethanol game. The current Federal Energy Bill calls for doubling the amount of ethanol in gasoline, raising demand to five billion gallons a year. If passed, ethanol would replace the additive MTBE which is required by law to help gas burn cleaner, thus reducing air pollution. At least 18 states however have outlawed MTBE because of concerns over groundwater contamination. Tim Curtiss is taking advantage of the situation. Plans are underway for his company to open an ethanol plant in Medina.

Tim Curtiss: As you look up and down the side of the building you see a very extensive rail siding which actually for most of it’s way consists of two parallel tracks this runs down into the wooded area at one end of our property.

The co-founder of Liquid Resources says this 45,000-square-foot gray metal building will soon be processing ethanol, but not from corn. Instead, old soda pop and beer will be the raw ingredients. Curtiss says he’ll make money selling the ethanol, receiving a disposal fee from beverage producers, and getting money for recycling empty cans.

Tim Curtiss: The real financial attraction is that the financial model of providing a valuable service to suppliers who have to dispose of waste and getting compensated for that. And on the other hand then taking their waste and processing that into something valuable and selling them we thought made a compelling business case.

If all goes well, the plant will eventually employ 25 to 30 workers and produce up to 60 million gallons a year of ethanol. But Curtiss says his future rests the hands of the public.

Tim Curtiss: We worry as to what could keep you up at night, if there’s some kind of national backlash either at the consumer level, or at the political level against ethanol, a lot of consumers at least in Ohio don’t even realize that 10% of the gasoline we buy in the major population areas in Ohio already has ethanol in it. You worry, what if people get a mistaken perception that there is something bad about that. I don’t know how that would happen, but stranger things have happened.

Maybe not so strange, when you consider that some consumers don’t trust ethanol. Although ethanol has long been perceived as being harmful to automobile engines, Brian Newbacher says the additive is perfectly safe.

Brian Newbacher: It could be a perception thing for people who recall the debate about it in the 70’s.

Newbacher is with the American Automobile Association in Cleveland.

Brian Newbacher: To the best of our knowledge here at triple a it’s not anything that people should worry about.

Newbacher admits cars built before 1980 might have problems. He advises drivers to check their owner’s manual if they’re in doubt. However the rush to embrace ethanol has some environmentalists concerned. Sierra Club leaders only give the additive a mixed review. They would like to see more research done on its effects before suddenly putting an additional 2 billion gallons in the nation’s gasoline supply - nearly doubling the amount already found at the pumps. In Cleveland, Mike West, 90.3.

There is growing concern that producing ethanol wastes more energy than it produces.
Join us for part two of our report on ethanol.

Additional Information

* National Corn Growers Association
* Ethanol from Corn, a report by Tad Patzek (PDF)

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