Different fuel blend offers hope to ethanol industry - KTIV News 4 Sioux City IA: News, Weather and Sports

Different fuel blend offers hope to ethanol industry

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Rising costs of corn has caused some plants to shut down or slow production. Rising costs of corn has caused some plants to shut down or slow production.
JACKSON, NE (KTIV) -

The ethanol industry has hit a few bumps in the road lately, but Siouxland plant managers are still optimistic.

An ethanol plant in Merrill, Iowa cut back production because of the drought, last September. Then, earlier this month, seven ethanol plants in Nebraska shut down due to high corn prices.

But the Administrator of the Nebraska Ethanol Board says plants are adjusting to new realities in the market.

"Many of the facilities in the country have cut back to some extent. Others have idled their facilities. And as a result, we're seeing less of a demand on corn. But the high price of corn certainly remains one of the fundamentals of ethanol plant economics," said Todd Sneller, spokesman for the ethanol board in Nebraska.

The next big thing in ethanol could be "E-15". Right now, many drivers are using a 10 percent blend of ethanol and gas. And that blend has become a common sight at gas stations.

"Ethanol is here to stay. To replace that 10 percent of fuel with anything else at the moment is going to be hugely expensive on the consumer," said Byrne.

Plus, if demand causes a switch to 15 percent, that would give the ethanol industry a big boost.

Right now, this plant uses about 17 million bushels of corn each year. That capacity could go up, if E-15 gets more widespread approval.

Nationwide, folks are using more than 13 billion gallons of ethanol fuel each year, partially because of U.S. government mandates for alternative fuel. It's even gotten some big stage exposure.

"I'm not a mechanic, I'm no expert on cars, but I do know that NASCAR has now run 2 million miles with ethanol-fueled cars," said Eamonn Byrne, CEO of Plymouth Energy LLC.

Byrne says those 13 billion gallons are more than 10 percent of the U.S.'s total for the year, and a big reason why gas prices have stayed lower lately.

In Nebraska, Siouxland Energy's general manager Chuck Holberg says that change will be driven by consumer needs. He says consumers just aren't using as much fuel, period, as they used to.

"We're a fuel additive. We fit into gasoline. When demand for gasoline drops, the demand for what we add too, drops as well," said Holberg.

While 10 percent ethanol is standard in most blends, E-15 would require 50 percent more product. And Holberg says he's just waiting for consumer demand to increase.

"We likely will see limited distribution for it, unless demand is for it, from the consumer. I'm a little bit concerned about how long that will take to get that implemented and fully developed," said Holberg.

So, foreign markets might be the place to look. There, they'll be competing against nations with other abundant resources.

"We compete with the Brazilian sugar cane, which wouldn't be a big deal if there was enough demand overall for product," said Holberg.

Until then, the trucks will keep their steady flow, in and out of this ethanol plant.

Plant managers we spoke with also emphasize the importance of byproducts, or co-products, that ethanol processing creates.

Those include carbon dioxide for food processing, corn oil, and dried and wet distillers grains, which are shipped locally to several feedlots around Siouxland.

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