As plans proceed for a third ethanol plant in North Dakota, a small cloud is on the national horizon: the new Congress.
The energy bill that was stalled in the old Congress is dead. A new bill will be on the agenda when the new Congress convenes in January. Power has shifted in both houses. Thus far, there is no serious attempt to strip ethanol incentives from a bill. But it's no secret that ethanol mandates are not popular everywhere.
If ethanol takes a hit, the fledgling ethanol industry will be hurt. New plant construction could halt and operational plants might close or be forced to reduce production.
Ethanol is a relatively new fuel made from biomass, mostly corn. It's clean-burning, renewable and 100 percent domestically produced. As with any new technology, ethanol has benefited from state and federal incentives, including mandates for use in motor fuel blends in several states and large cities.
Among the most important boosts for ethanol was a provision in the old energy bill replacing the poisonous additive MTBE with ethanol as a oxygenated gasoline additive. That action alone had the potential to increase the market for ethanol-blended fuels from coast-to-coast, not just Midwest farm states.
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However, the MTBE replacement provision ran into fiece opposition from a few senators, including Democrat Diane Feinstein of California. A new energy bill affords Feinstein and others (big oil?) an opportunity to undermine any meaningful ethanol mandate. If they have their way the U.S. House and Senate, ethanol's progress could be derailed.
The benefits of ethanol continue to be debated. There is no network to get it where it's needed, say critics. It takes more energy to produce a gallon of ethanol than the energy in the ethanol, they say. There is something wrong with using food (corn) to produce motor fuel, they suggest.
First, a market will respond to demand as ethanol becomes a widely used additive. A national network to get it to users will develop, as it has already in the Midwest.
Second, the energy argument collapses when compared to the costs -- both economic and political -- of U.S. dependence on foreign oil.
Finally, the nation produces more corn (and can produce more) than it needs for food. If the demand for corn increases because of ethanol production, American farmers will respond.
The immediate threat to the ethanol industry is political. New majorities in Congress (in league with several minority members) could more easily tilt away from alternative energy sources (biomass, wind), and that could mean an energy bill custom-made for multi-national oil companies. In other words, business as usual. If allowed to happen, it would be a huge step backwards for U.S. energy independence.
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