Giving ethanol a good name: Advocates tout increase in production, jobs for state

Source: M.P. KING • Wisconsin State Journal  • Posted: Tuesday, January 31, 2012

This large pile of corn, generated in just two days from arriving trucks and already stripped of starch used to make ethanol, will be sold as livestock feed by Badger State Ethanol in Monroe.

Wisconsin ethanol production

Year Gallons produced
2010 438.2 million (9 plants)
2009 462.0 million (9 plants)
2008 447.3 million (9 plants)
2007 283.8 million (8 plants)
2006 210.4 million (5 plants)
2005 171.8 million (4 plants)

Source: 2011 Wisconsin Biofuels and Alternative Fuels Use Report; Wisconsin Office of Energy Independence

MONROE — Eric Huschitt is tired of the bad rap that plagues the ethanol industry.

For instance, the general manager and vice president of operations at Badger State Ethanol that sits on the edge of Monroe is aware that the expiration of the federal ethanol tax credit at the end of 2011 was one of those rare subjects that liberals and conservatives came together to support.

“Who got that tax credit?” Huschitt asked before answering that the companies that blend the corn-based ethanol with gasoline received that 45-cents-a-gallon tax credit. Ethanol production plants like Badger State didn’t get a dime.

“We haven’t had any good public relations to go with the bad public relations,” Huschitt said. “We’ve always had issues to battle.”

The news certainly isn’t all bad for the ethanol industry.

Much of the gasoline used in the U.S. is blended with 10 percent ethanol. There’s also an E-85 blend, with 85 percent ethanol, for flex-fuel vehicles.

An early production estimate for Wisconsin’s nine biggest ethanol plants in 2011 is a record 504 million gallons, according to the Nebraska Energy Office, which looked at production of every ethanol plant in the nation.

That would be 65.8 million gallons more than 2010 and 42 million gallons more than the previous record set in 2009. The Nebraska report also estimated that all nine Wisconsin plants produced to their capacities last year.

Gary Kramer, co-founder, president and chief executive officer of Badger State Ethanol, backed up those numbers by saying, “I know that 2011 was a very good year for the ethanol industry in general.”

Kramer added that the Monroe plant, which employs 50 and is open 24 hours every day of the year, produced 58 million gallons in 2011. He also said 200 trucks visit his plant every day of the week, either hauling corn in or taking ethanol out.

“That generates jobs, as well,” he said.

Nationally, ethanol producers have found eager buyers beyond America’s borders. Just 324,000 barrels of ethanol were exported in January 2010. That number grew to 3.3 million barrels in July 2011, according to the U.S. Energy Information Administration.

Wisconsin’s second most valuable export in the first three quarters of 2011 was a category that included ethanol and was valued at $217 million, according to a state Department of Agriculture report. That’s a growth of 169 percent over the same period in 2010, the report said.

Beyond that, Huschitt said producers like Badger State are already extracting oil from feedstock and selling it to be used for food coloring or biodiesel. He added only 40 percent of the nation’s ethanol producers are extracting oil.

Huschitt, who has worked at Badger State since it opened in 2002, also believes it won’t be long before second-generation cellulosic ethanol will be affordably made out of that same feedstock as well as from corn stover and wood waste.

“That’s the new frontier,” said Gary Radloff, director of Midwest Energy Policy Analysis for the Wisconsin Bioenergy Initiative at UW-Madison.

What’s exciting for ethanol plants is that much of the progress is taking place under their roofs. “So the ability to take advantage of that pre-existing infrastructure is good business and good environmental consideration. We don’t need to reinvent the wheel,” said John Greeler, director of education and outreach at the UW’s Great Lakes Bioenergy Research Center.

Ethanol is produced by fermenting converted corn starch with yeast. That takes 33 percent of a grain of corn.

Distiller’s grain is what remains after the ethanol is removed from fermented corn mash. Much of it is sold as livestock feed, which is the second-largest revenue generator for ethanol plants.

The Renewable Fuels Association said that America’s ethanol producers supplied nearly 35 million metric tons of livestock feed in the 2009-10 marketing year. The RFA also said livestock feed production represented nearly $4 billion in income for ethanol plants in 2010, and 25 percent of that feed production was exported.

Smaller ethanol producers still worry about the implications from refineries like San Antonio’s Valero Energy buying 10 ethanol plants, including the former Renew Energy in Jefferson. That’s a big change from the rural co-ops that dominated ethanol production 10 years ago.

“The ethanol arm of their business is their most profitable part,” Kramer said of the refineries. “So what are they going to do in the future? They are going to buy more.”

Bill Day, media relations director for Valero Energy, said buying ethanol plants was a logical step for his company. “Since we were required to have ethanol blended into our gasoline that we are selling in our retail stores (gas stations) anyway and we’re a fuel manufacturer, we decided to get into the ethanol business,” Day said. “We actually bought our plants out of bankruptcies. … To us, we can run these plants efficiently … why not do it?”

Critics of ethanol producers also believe they steal corn that should be used for food. Day scoffed at that notion.

“I would think if you are a farmer and you think the demand would be stronger for food corn than ethanol corn, you are going to plant food corn. He’ll plant whatever he thinks will bring him the best price and have the most demand,” Day said. “We prefer to let the markets decide that. We don’t get involved in the argument. We just make fuel.”