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Corn+Soybean Digest

Biofuels Use Builds: Ethanol and biodiesel pump new life into your crops

It's hardly news that the U.S. is dependent on overseas oil. In fact, 60% of the syrupy crude comes from foreign sources. Projections point to 70% dependence by 2010.

That's subject to change, however, with debate of the new energy bill that contains the recent renewable fuels standard (RFS). More and more, the fuel that powers gas and diesel engines across the country will contain ethanol and biodiesel — homegrown from your corn and soybeans.

If passed, the federal requirement will increase biofuels usage from 2 billion gallons in 2003 to 5 billion gallons by 2012. Especially significant is that the RFS will help clean the air, reduce our dependence on foreign oil and renew rural America, says Garry Niemeyer, Illinois Corn Growers Association president.

A study by AUS Consultants reports that the RFS will create 214,000 new jobs in the U.S. economy, displace 1.6 billion barrels of oil over the next decade and increase investments in rural communities by more than $5.3 billion.

What's important is that the ethanol industry now uses about 800 million bu of your corn a year. Projections say that should jump to 1.8-2 billion bu by 2012. Today, more than 12% of all U.S. motor fuels contain ethanol.

The newer kid on the block, biodiesel, only uses 8 million bu of soybeans a year to produce 10-15 million gallons. However, if both the RFS and the biodiesel partial tax exemption become law, expect rapid growth. According to the National Biodiesel Board, an estimate of just how much fuel would be used is difficult to predict. But since 2000, it estimates that biodiesel production has doubled each year.

For biodiesel, about 10 companies have invested millions of private dollars into manufacturing plants and are actively marketing biodiesel. Another seven companies, mostly in the Midwest, have reported plans to construct biodiesel plants.

More than 200 major U.S. fleets already use biodiesel in their vehicles, including the U.S. Postal Service, the U.S. Air Force, the city of St. Louis, Phoenix School Districts and even Yellowstone National Park.

For ethanol, 62 plants are in operation nationally; another 14 are under construction.

Produced since the mid-70s, ethanol is widely used throughout the U.S., especially in government fleets, says Mike Bryan, BBI International. “Now, hundreds of thousands of new vehicles are flex-fuel vehicles capable of running on 85% ethanol,” says Bryan.

Obviously, the momentum for renewable fuels is running at a frenzied pace. New production plants, new federal and state requirements, new engine concerns … the list goes on.

This special report, “The Biofuels Boom,” addresses much of the debate over the use of ethanol and biodiesel. We hope this report will help you size up the potential that's ahead for renewable fuels.

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