The enthusiasm over ethanol ahs turned to pessimism in some quarters as the fortunes of the oil industry shifted with changing gasoline prices. The changes have made it harder for ethanol plants to make money. However, Tony Hahn, chief of staff for the Indiana State Department of Agriculture, still says ethanol will play an important role in Indiana's future.
He made the statement recently at an Ag Day Celebration in Franklin. After citing facts and figures about ethanol's growth in the mid-to-late 2000's, especially in Indiana, he boiled his message down to a few key statements.
"If you get nothing else from what I discuss, I want you to go away with these points," Hahn told the crowd gathered for the annual Farmer's Share breakfast in Johnson County. "There is still definitely a place for ethanol in Indiana and in the U.S.
"And several plants are still making a profit. How tight it is for an individual plant or company likely depends upon when the plant was built. For plants constructed after 2006, costs to build were much higher. Their margins are tighter.
"True, there are a lot of questions about the future of ethanol, and the answer to many of them is 'it depends.'
That hasn't dampened the enthusiasm for ethanol within ISDA, he notes. Going from no E85 pumps in 2005 within Indiana borders to about 120 today, that now makes Indiana 3rd in the country in number of E-85 pumps available for customers to use. Averaged over 92 counties, however, that's still less than 1.5 pumps per county. Obviously, pumps aren't distributed evenly. The E85 product for flex-fuel vehicles is easier to find in some locations than in others.
The state through ISDA does cost-share in some situations if a station owner wants to install and E-85 pump, Hahn notes.
E-85 is only part of the story for ethanol, however, The other is the percent blenders can and will put in gasoline. Traditionally, that's up to 10%. Some have investigated going higher on the percentage of ethanol, but other factors become involved, including the cost of petroleum fuel vs. the cost of ethanol. Purdue University ag economists who think that the 10% limit currently in use may hold back ethanol growth call it the 'blending wall.'
If all ethanol went away, Hahn estimates that the U.S. would need to import another 10 billion gallons of petroleum annually. Also, farmers would have to find a home for another four billion bushels of corn each year. Since ethanol ahs replaced MTBE as an oxygenation additive in many cases, and with current government standards actually calling for an increase in use of ethanol by set dates in the future, he believes ethanol will continue to be an important part of the alternative energy puzzle in the years to come.