Hungry ethanol plants consume 20% of corn crop By LIB QUAID and LIBQUAID Associated Press 6/4/2006
CO/ON RAPIDS, Iowa - A tractor trailer rig rumbles into the Tall Corn Ethanol plant. Corn pours from openings in its belly to bins underground, where conveyor belts and buckets haul it to gleaming steel silos rising 13 stories above the Iowa plains. The 40-acre distillery turns corn into alcohol in quantities that would make a moonshiner drool. Instead of white lightnin', the brew is converted to ethanol, a fuel that makes money for farmers and is seen as a possible solution to today's high oil and gas prices.
Like the other modern-day stills dotting the Midwestern landscape, the Co/on Rapids plant reached capacity soon after opening - within 12 days, to be precise.
Ethanol production in the United States is growing so quickly that, for the first time, farmers expect to sell as much corn this year to ethanol plants as they do overseas.
"It's the most stunning development in agricultural markets today - I can't think of anything else quite like this," says Keith Collins, the U.S. Agriculture Department's chief economist.
The amount of corn used for ethanol, estimated at 2.15 billion bushels this year, would amount to about 20 percent of the nation's crop, according to department projections.
Even as ethanol devours corn and pushes prices higher, the president and Congress are calling for even greater ethanol use. Wall Street cannot seem to get enough of ethanol-related investments. Automakers are speeding ethanol-capable vehicles onto the road.
Yet the ethanol industry is not without its critics, who question whether tax incentives provided by Congress are really needed.
The enthusiasm for ethanol makes farmer Lynn Phillips want to grow more corn. Phillips helped raise the money for the farmer-owned Tall Corn plant, which opened in 2002 as a way to make more money by processing every kernel of locally grown corn.
"We saw train cars after train cars of raw material being shipped away and value being added somewhere else," said Phillips. Now, the corn "is still going out on train cars - it's just going out in the form of ethanol and distillers' grain."
Ethanol is combined with unleaded gasoline to boost its octane rating and reduce emissions.
The most common blends are 10 percent ethanol, approved for any make or model sold in the United States, or 85 percent ethanol, known as E-85 and used in specially made flexible fuel vehicles. About 5 million vehicles in the United States can run on E-85; more are in production.
With demand comes expansion. In Iowa alone, three new ethanol plants opened last month. The industry likely will outpace a mandate from Congress to pump out 7.5 billion gallons a year by 2012, according to Collins.
Meanwhile, lawmakers envision vastly more ethanol in the nation's automobiles. Sens. Tom Harkin, D-Iowa, and Richard Lugar, R-Ind., are pushing to require 60 billion gallons of ethanol and soy-based biodiesel by 2030.
An expansion that big would require sources for ethanol besides corn. Ethanol is made from sugar cane in Brazil, which meets about half its fuel demand with ethanol. Sorghum, another feed grain, accounts for about 3 percent of U.S. ethanol.
