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Ethanol nears roadblocks
BEN SHOUSE
GANNETT NEWS SERVICE
SIOUX FALLS, S.D. -- South Dakota is, in many ways, the birthplace of ethanol. Nearly 30 years ago, a South Dakota State University professor demonstrated for politicians in Washington, D.C., how to turn corn into fuel.
Today, the state is a leader in the industry with almost one in every three rows of corn going to ethanol.
But three factors that helped in the past now could become obstacles to growth:
- Economics: Supply is growing, and demand is uncertain. In addition, a swing in the price of gasoline or corn could reduce ethanol's profitability, even trigger buyouts or bankruptcies.
- Politics: A bill key to industry expansion is snarled in Congress, and California -- the No. 1 market -- is trying to escape the federal requirement that ethanol be used in areas with high pollution rates.
- Corn: The industry is still building new plants but mostly in Iowa. Few remaining sites in South Dakota may have enough corn to support a new plant.
"It's been a good time, but we're coming into a much tougher time," said Lisa Richardson, director of the South Dakota Corn Growers Association and Corn Utilization Council. "We have an excess ethanol supply out there."
Few predict a major downturn, especially with gasoline prices looking steady above $2 per gallon. But there are signs the industry's maturation will not be as happy as its childhood.
The fitful evolution of ethanol began in a South Dakota State University lab in 1975. Microbiologist Paul Middaugh resurrected the idea from the days of Henry Ford, and recruited brothers Dennis and Dave Vander Griend to help with the engineering. ............
http://www.theolympian.com/home/news...s/117586.shtml
BEN SHOUSE
GANNETT NEWS SERVICE
SIOUX FALLS, S.D. -- South Dakota is, in many ways, the birthplace of ethanol. Nearly 30 years ago, a South Dakota State University professor demonstrated for politicians in Washington, D.C., how to turn corn into fuel.
Today, the state is a leader in the industry with almost one in every three rows of corn going to ethanol.
But three factors that helped in the past now could become obstacles to growth:
- Economics: Supply is growing, and demand is uncertain. In addition, a swing in the price of gasoline or corn could reduce ethanol's profitability, even trigger buyouts or bankruptcies.
- Politics: A bill key to industry expansion is snarled in Congress, and California -- the No. 1 market -- is trying to escape the federal requirement that ethanol be used in areas with high pollution rates.
- Corn: The industry is still building new plants but mostly in Iowa. Few remaining sites in South Dakota may have enough corn to support a new plant.
"It's been a good time, but we're coming into a much tougher time," said Lisa Richardson, director of the South Dakota Corn Growers Association and Corn Utilization Council. "We have an excess ethanol supply out there."
Few predict a major downturn, especially with gasoline prices looking steady above $2 per gallon. But there are signs the industry's maturation will not be as happy as its childhood.
The fitful evolution of ethanol began in a South Dakota State University lab in 1975. Microbiologist Paul Middaugh resurrected the idea from the days of Henry Ford, and recruited brothers Dennis and Dave Vander Griend to help with the engineering. ............
http://www.theolympian.com/home/news...s/117586.shtml