WisBusiness: Ethanol could ease U.S. addiction to oil

By Gregg Hoffmann

MILWAUKEE – The ethanol industry has experienced a year of unprecedented growth in the U.S. and world, but still has work to do to continue to become a sustainable alternative to “our addiction to oil.”

Speakers at the 22nd annual International Fuel Ethanol Workshop & Expo made that point Wednesday at the Midwest Airlines Center.

“What a transformation this industry has gone through,” said Mike Bryan, CEO of BBI International, during his opening remarks. “The Midwest is the Saudi Arabia of renewables. We can contribute to a cleaner environment, grow a new crop of energy every year and are a grassroots industry.”

Bryan also said the ethanol industry is experiencing “uncontrolled growth, has money pouring into the industry and has projects backed up.”

In that regards, it is similar to the oil industry 100 years ago, Bryan said, also comparing the industry to a “growing teenager.”

“We’ve had a growth spurt and we don’t know really what is going on,” he said. “We will grow into a strong adult.”

Bob Dinneen, president and CEO of the Renewable Fuels Association, said almost 5 billion gallons of ethanol have been produced in the U.S. With that growth, 153,000 jobs have been created and 101 plants are up and running.

“About 40% of the nation’s fuel supply now contains an ethanol blend,” Dinneen said. “But, we don’t want to be just an additive for gasoline; we want to be a replacement option.”

The Energy Bill signed by President George Bush last August contained strong incentives for ethanol and has been a key in U.S. growth. Dinneen said Bush is “the most pro-ethanol president we’ve ever had.”

“His ‘America is addicted to oil’ statement was significant for our industry,” Dinneen said. “I think most people knew that, but to have an oil guy from Texas acknowledge it was significant.”

High oil prices, renewed commitment of automakers to develop cars that run on flex-fuel, the fact that Indy 500 cars now run on ethanol, change in attitude by the oil industry toward ethanol and investment interest from Wall Street also have helped ethanol, Dinneen said.

Suzanne Hunt, Biofuels Project Manager for Worldwatch Institute, reported on a year-long study done by that group of global ethanol trends.

“Interest in renewable fuels around the world is high,” according to Hunt, whose organization’s study will be published this fall and is available in summary form on the group’s web site.

Brazil leads the world in ethanol production, primarily from sugar cane. The U.S. is a close second, followed by China, the European Union and India.

Innovative techniques are being developed worldwide in the areas of synthetic ethanol and more environmentally-friendly practices of growing grains for refining purposes, Hunt said.

Not everything is perfect for the industry, however. Dinneen said he did not expect any significant additional legislation to come out of Washington D.C. this year. “The town is dysfunctional right now, with hearings and investigations down the road,” he said.

Hunt said the Worldwatch study showed that some significant trade barriers around the world inhibit the development of a global infrastructure for ethanol development and distribution.

She also said some international environmental policies are needed. “For instance, if we move into natural grasslands to plant grains for ethanol much of the environmental benefits are lost,” she said.

Overstressed water supplies and soil degradation are other areas that need to be addressed worldwide, Hunt said.

But, all the speakers emphasized that the growth of the last year can be sustained if wise decisions are made by policymakers and those in the ethanol industry.

“The government knows ethanol is here to stay,” Dinneen said of the U.S. government. “We might not see additional legislation this year, but we have set a precedent for future years.”

The FEW conference has drawn 3,500 participants from around the world, a record turnout. Only a few weeks ago conference organizers were predicting a turnout of 2,200.

“U.S. Farm Report,” a nationally syndicated agribusiness TV show, is being taped at the conference. Sessions will run through Thursday and concentrate on topics important to producers of ethanol.

On Friday, participants will tour the United Wisconsin Grain Producers ethanol plant in Friesland.