December 2004 eNews Bulletin

Ethanol Production Eyed for Idaho’s Magic Valley

November 12, 2004
by Terrell Williams

The Magic Valley area of Southern Idaho could be a good place to build an ethanol plant.

Idaho Congressman Mike Simpson met last week with Twin Falls County commissioners, State Sen. Tom Gannon, and other business and civic leaders for a seminar titled “What’s New in Washington, D.C., Regarding Ethanol.”

The group met at the College of Southern Idaho with a list of questions on the agenda. Is the time right? Can we afford to produce ethanol? How will we get there? Is it time for an action plan for the Magic Valley?

“I’m a big supporter of ethanol,” Simpson said. “I think it’s part of our future. We’ve been talking about it long enough. My question to you is, what does it take to get this moving?”

Tom Billington, of the Twin Falls County Farm Bureau, asked if public funds are available for the start up of ethanol production.

The energy bill will be a top priority when Congress resumes, Simpson said, and a corporate tax bill that just passed had some ethanol provisions in it as production incentives. “There is a lot of support in Congress for this,” he said. “There will be money available in the energy bill, if we ever pass one.”

Ethanol production would be profitable for farmers, who could sell corn for fuel, Simpson said, and local dairies could use the by-product as a high protein feed. It also reduces automobile emissions for cleaner air. But, he said, those who profit from use of petroleum are not proponents of ethanol.

“Members from Texas are influential,” he said. “We need to come to some compromise.”

Commissioner Bill Brockman said rising gasoline prices are creating a better market for ethanol. At a feasibility meeting several years ago, he said, gas was $1.25 a gallon and the cost to produce ethanol was $1.35, so advocates for ethanol couldn’t generate much interest.

Gannon said he recently went to Minnesota, where there are 78 ethanol plants in operation and 16 more under construction. Farmers there have a co-op, he said, so they profit from the sale of ethanol and also from the sale of corn to make the fuel. Use of ethanol has alleviated much of the smog problem in Minneapolis, he said. Also, legislation supported by environmentalists requires gasoline sold in that state to be at least 10% ethanol.

“What really got it off the ground in Minnesota was, they became an E-10 state,” Gannon said. “Maybe we need to consider developing some incentives (in Idaho). E-10 would create an instant demand.”

Simpson said E-10 legislation would be more likely to pass if it were pushed by the agricultural industry and the environmental community rather than only by ethanol plant builders or investors.

In the Magic Valley, Gannon said, the abundance of dairies is a potential market for ethanol plant byproducts, and manure from dairies could be used with anaerobic digesters to produce methane gas to power an ethanol plant. In Minnesota, he said, ethanol promoters have raised substantial money in a short amount of time because they have comprehensive business plans and strong legislative support.

Payette County Commissioner Dennis Codr also toured Minnesota to see its ethanol plants. “I was very impressed,” he said. “We recognized that this is something that’s good. And it’s viable. It’s been a long time coming.”

“Mike Simpson has been a cheerleader for ethanol in Idaho and across the nation,” Codr noted. “And that is greatly appreciated by us.”

Codr said farmers and investors in his region northwest of Boise wanted to build an ethanol plant in Idaho. But even though they had grants for feasibility studies and value-added grants that raised $1 million, the group in four years of trying could not generate any support or incentives from Idaho officials. However, Oregon, through its Community Solutions Program, had a liaison person who gave Codr’s group direct contact with legislators. Thanks to this shortcut interaction, Codr said, Oregon legislators were well informed about the ethanol plant proposal, and, wanting it in their state, they offered a long list of perks and incentives.

Oregon officials also contacted growers throughout the region to get production commitments of 100,000 acres of corn, wheat and barley to supply the plant, and they helped secure a market for ethanol sales. “They treated us nicer,” Codr said.

As a result, a bio refinery that produces 30 million gallons of ethanol per year will be built next year on land Codr’s group purchased in Oregon just across the state border near Ontario. “We should break ground in early spring,” Codr said. “Due to politics, it will not be in Idaho.”

Billington asked what Codr’s feasibility study said it would take to put an ethanol plant in Twin Falls County or in Cassia County (at Burley).

Codr said those areas were marginal because not enough corn is grown there at this time, and there needs to be more of a local demand for ethanol. Also, he said, there is opposition because gas companies do not want to sell 10% less product. “Citizens of Idaho want to buy it, but they’re being prevented,” he said.

Discussion followed, with some saying that maybe the tons of corn now being shipped directly to Magic Valley dairies could go first to an ethanol plant, and then fed to cows as a byproduct. Dairy manure could be used to power a plant with methane gas. Also, they said, through voluntary or state-legislated measures, ethanol could be made available at local gas stations.

James Glancey, president of Wyoming Ethanol, said that at one time, 17% of all gas sold in Idaho was ethanol. Now it is down to less than 5%. “It’s strictly a matter of working with retailers,” he said.

Local gas stations are glad to have ethanol, he said, but major oil companies do not want to share the market. Also, the automobile industry is cautious about building cars that run on higher percentages of ethanol.

Glancey said he bought Idaho ethanol from ethanol plants at Simplot potato processing plants in Heyburn – which operated from 1983 until last year when the potato plant shut down – and in Caldwell, which is closing now because potato processing there is down to one-third capacity.

The national market for ethanol is good, he said, and plants in the Magic Valley area probably could operate at a profit by selling corn byproducts to feedlots and dairies. Ethanol production, he noted, removes starch but not protein from the feed.

Glancey said his ethanol plant in Wyoming operates on feed sales to owners of 150,000 beef cattle in a 50-mile radius. “We have more customers than we have product,” he said.

In other countries, methane-powered ethanol plants are common, Glancey said. “It’s nothing new,” he said. “They’ve been doing it in Europe for decades. We’re just behind times.”

Russ Hendricks, Farm Bureau regional manager, said ethanol benefits include clean air from reduced car emissions, rural economic development through marketing of crops, and energy security. “One gallon is one less to import from somewhere else,” he said. “It’s renewable.”

“E-10 would be wonderful,” Hendricks said. “It’s never been here in the state … but the benefits are there for everyone to see. We need to work with our local officials here and see what we can do.”