December 2004 eNews Bulletin

Editorial: Time Is
Now for Biofuels
November 19, 2004
by Elaine Shein & Carl Sampson
Farmers in the Midwest
are leading the way toward reducing our nation’s dependence on foreign
oil, cleaning the air and increasing the profitability of American agriculture.
Along the way, they have added a new buzzword to the modern agricultural
lexicon: biofuel.
The term biofuel
describes the production of ethanol from grains such as corn or wheat
or the production of diesel fuel from canola or mustard seed.
In the Midwest, biofuels
are big business. Nationally, 82 ethanol plants have a production capacity
of 3.5 billion gallons a year. Most of those plants are in the Midwest.
Another 14 plants are under construction and will add 600 million gallons
to the nation’s overall capacity.
While this won’t immediately
put a significant dent in the nation’s thirst for crude oil - the United
States imports 500 million gallons of oil from Saudi Arabia alone every
week it does put the United States on a path toward greater energy independence.
States like Minnesota
have taken the lead in encouraging ethanol production. The Minnesota legislature
requires that state’s unleaded gasoline to contain 10% ethanol.
That requirement has created five main benefits:
• First, it
assures a built-in market for the ethanol produced at the 16 plants across
the state, many of them farmer-owned cooperatives. In turn, the cooperatives
and companies create a market for the farmers’ corn and create jobs building
and operating the plants. Neighboring state Iowa has 14 ethanol plants,
with six more under construction. Nearly all of those plants are in rural
areas, strengthening the local economies.
• Second, biofuel
reduces Minnesota’s foreign fuel consumption by 10%. The United
States depends most heavily on the Middle East for crude oil; political
instability in that region makes it wise for the United States to be less
dependent on oil from that area. Some people worry about whether their
cars can burn ethanol. Although E10, the 10% mixture in Minnesota,
requires no modification of cars to burn it, E85, a mixture of 85%
ethanol and 15% gasoline available at some stations across the
nation, does require minor modifications.
• Third, unlike
oil refineries, ethanol provides a valuable by-product as potential cattle
feed. The methane produced by the cattle can then be used in a digester
to generate the electricity to run the ethanol plant. This is energy-efficient,
plus it reduces air pollution from the cattle.
• Fourth, ethanol
burns clean. That opens the doors for environmentalists and others who
are looking for ways to clear our nation’s air. And, as a renewable energy
source, ethanol requires no drilling platforms, no mines and no dams.
• And fifth,
ethanol’s stable price moderates the price of fuel at the pump as the
price of foreign crude oil bounces up and down, dragging U.S. drivers’
wallets along with it.
Gasoline prices have
skyrocketed in the past year. Crude oil prices have jumped from an average
of $30 to nearly $50 a barrel, propelling gasoline prices up an average
of 47.2 cents a gallon, according to the U.S. Energy Information Administration.
Diesel fuel prices have jumped even more, up an average of 65.1 cents
a gallon in the past year.
In the West, however,
biofuels haven’t yet taken hold. Small plants in Idaho, Washington and
California have used byproducts such as potato and brewery waste to make
ethanol, but that’s all. That could change in the near future. Treasure
Valley Renewable Resources plans to build a biofuel plant near Ontario,
Ore. Construction is set to begin next spring on the 30 million-gallon-a-year
plant.
Oregon officials are
on the right track. They worked with plant sponsors and area farmers to
get a commitment for 100,000 acres of corn, wheat and barley to supply
the TVRR plant. In addition, the state offered other incentives, the plant’s
sponsors say. Other biofuel proposals are in various stages of development
in Boardman, La Grande and St. Helens, according to the Oregon Department
of Agriculture.
The lessons learned
in the Midwest, however, involve more than incentives and cooperative
local and state governments and federal tax credits and other incentives.
The lessons are that ethanol plants work, as long as the local, state
and federal governments work together with the sponsors and other groups
to provide the tax incentives and help create a market. That means a requirement
for the use of biofuel blends at the pump.
Oregon officials are
also looking beyond ethanol. Canola and mustard seed can be used to produce
biodiesel. As is the case with ethanol plants, the byproduct of making
biodiesel can be used as cattle feed.
Farmers and legislators
around the West are hearing the wake-up call for biofuels. Oregon
is where Minnesota was 10 years ago, Tom Koehler of the Celilo Group
recently told the Oregon Board of Agriculture. Minnesota now produces
10% of its fuel requirements. There will never be an oil refinery
built in Oregon, but I can see a day when there is a biofuel refinery
in every Oregon county.
And elsewhere, as
long as the plant sponsors do their homework and obtain contracts for
their raw materials and products. In addition, the state or federal government
must provide the key ingredient demand in the form of a requirement
that biofuels be used.
Some legislators are
listening closely when the word biofuel comes up. Oregon Rep. Jeff Kropf,
R-Sublimity, is one. We have a profound, unique opportunity to get
things going, he told the board of agriculture. He is correct. Now
is the time for Oregon and the rest of the West to get serious about biofuels,
but they also must make sure the foundation is in place before boarding
the biofuel bandwagon.
By working together,
farmers, government officials, entrepreneurs and even environmentalists
can make biofuel plants a reality. Done correctly and prudently, the
results will benefit our farmers, our ranchers, our environment and our
nation.
|