Despite a movement by some in Washington to reduce ethanol mandates, officials for Tharaldson Ethanol have no plans to scale back their plant slated to open in December near Casselton, N.D.
"At first glance, you probably would be concerned," said Russ Newman, Tharaldson Ethanol vice president of development. "But most of our sales have been what we call discretionary funding where the market has driven the demand.
"The price of the ethanol is less than petroleum prices so the retailers are using ethanol by choice, not by mandate," he said.
Tharaldson Ethanol will produce 100 million to 110 million gallons of ethanol a year - about 10 million gallons more than initially estimated because of steps taken to make the plant more efficient, Newman said.
"As long as a barrel of oil is over $100 a barrel, the future for ethanol is very bright," he said.
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VeraSun Energy Corp., with headquarters in Brookings, S.D., and one of the nation's largest ethanol producers, is on pace to open a 100 million-gallon plant in Hankinson, N.D., by the end of June.
"Ethanol is not the only solution, but it's one that's available now," said Danny Herron, VeraSun president and CFO. "It's renewable. Each year we increase the yield. Our corn farmers get more efficient at what they do, so we're actually growing our ethanol reserves."
Ethanol has received a bit of a bad rap lately, industry leaders say. The renewable fuel is blamed for food riots around the world, higher grocery bills at home, environmental pollution and using up clean, fresh groundwater.
Ethanol producers and industry officials say those are unfair accusations and that the predominantly corn-based biofuel is being used as a scapegoat.
"Blaming ethanol for the food price increases is kind of a folly, because it's the increased cost in energy overall" that's contributing to those price hikes, Newman said.
"If it costs $4.50 a gallon for diesel (fuel) to drive their product to market, there's your biggest price increase," he said.
Wes Belter, a state representative from Leonard, said a lot of the increase in commodity prices is being blamed on ethanol.
"We're forgetting that the world economy is doing very, very well, and so the rest of the world is demanding a lot of additional grains," he said.
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Retail food prices rose 4 percent last year, the largest increase since 1990. They are expected to rise 4 percent to 5 percent again this year. The ethanol industry says ethanol and other biofuels account for just 4 percent of the price surge, while the Department of Agriculture says the figure is closer to 20 percent, according to The Associated Press.
"I'm not going to sit here and tell you that we have not had an impact," said Randy Schneider, president of the North Dakota Ethanol Producers Association. "But that impact is so minute compared to other things" such as transportation.
Joseph Glauber, chief economist for the Department of Agriculture, told Congress earlier this month that prices for corn and other food commodities will remain at historically high levels as the U.S. ethanol industry expands, according to the AP.
Drought, increased demand for food in developing countries and higher fuel costs have greatly contributed to current food prices, he said.
Congress passed a law last year mandating an increase in corn ethanol production to 15 billion gallons by 2015 and 36 billion gallons by 2022. Some in Congress now say those rules should be suspended to put more corn back into the animal feed supply and to encourage farmers to plant other crops, the AP reported.
"Mandates are important to allow our industry to grow," Schneider said. "The last thing we want to replace is one dependency for another - replacing our dependency on Mideast oil with Brazilian ethanol."
Brazil is the world's largest exporter of ethanol and second-largest producer after the United States.
Some Minnesota ethanol plants have been the focus of community protests over concerns about water usage and pollution.
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That hasn't happened in North Dakota, Schneider said.
"We have a stronger agrarian background," he said. "These facilities are being built in small North Dakota towns that understand the importance of value-added agriculture."
Ethanol plants have to meet rigorous state Health Department requirements, Schneider said.
The industry is chastised for using 3 gallons of water to produce 1 gallon of ethanol. But, it takes 15 gallons of water to produce a gallon of gas, Schneider said.
The Tharaldson Ethanol plant will use filtered wastewater from Fargo's sewage treatment plant.
Argonne National Laboratory recently released a study comparing the average efficiency of the ethanol industry from 2001 to 2006, based on a survey of 22 facilities nationwide. The report showed that water consumption was down 26 percent, grid electricity use was down 15 percent and total energy was down 22 percent in dry mills and 7 percent in wet mills.
Argonne National Laboratory is based in DuPage County, Ill., and is one of the U.S. Department of Energy's largest research centers.
"We really do care about North Dakota and the communities we're involved in," Schneider said. "Every ethanol plant wants to be a good corporate neighbor."
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The Associated Press
contributed to this report
Readers can reach Forum reporter Tracy Frank at (701) 241-5526
