DARKE COUNTY - There are seven operational ethanol plants in Ohio, one of which is located just outside of Greenville - The Andersons, Inc., which was opened in conjunction with the Marathon Petroleum Company out of Toledo, in 2008.
The ethanol boom of 2008 has brought about many advances and benefits, not only to the industry, but also to the farmers and local communities, said Neill McKinstray, president of the ethanol group with The Andersons, Inc., and chairman of board of directors for the Renewable Fuels Association (RFA).
“While each ethanol plant might have somewhat different technology, they operate on a very similar scientific and operational basis, and produce similar impacts and products within their local areas,” McKinstray noted. “…Ethanol benefits corn growers, naturally. It’s an all-new demand for corn - exports, feed, and other industrial uses - this has all combined to raise corn prices significantly for farmers, who are then encouraged to plant more corn, and they have. That benefits farmers, for sure, but also the local communities because those farmers turn around and they put that money back into the economy.”
Tadd Nicholson, executive director of the Ohio Corn and Wheat Growers Association (OCWGA), said that from a consumer standpoint, corn ethanol has “achieved three main things”. It’s cleaner burning, he said, which helps the environment. It’s also helping to lower the cost of fuel, he said. The third benefit is that it’s providing jobs around Ohio, and spurring the economy of rural America, Nicholson noted.
“It’s good for everybody - retailers and consumers,” Nicholson said of corn ethanol, which makes up 10 percent (or more) of the gasoline used by every American consumer today. Corn ethanol is compatible with “every car, every engine in the U.S. today,” Nicholson stated. “And it’s less expensive, it helps us keep costs down.”
Corn ethanol, like the base product used to make it, is a commodity, which means the price is market-based, McKinstray explained. Currently, corn ethanol is trading for about $1 less than regular gasoline, he added.
“That dollar finds its way back into consumer pockets in savings,” McKinstray commented. “Consumers are looking at the pump, and gas is $3-something, and that’s not cheap, not compared to 20 years ago, but compared to what it would be without ethanol, relying exclusively on foreign-produced crude oil, those prices would be significantly higher.”
Ohio does not require that gas stations label their fuel as containing corn ethanol, Nicholson said, so many Ohioans may not even realize that they’re using corn ethanol, let alone saving money because of it. Having a 10 percent blend of ethanol in traditional gasoline is standard, Nicholson noted, but it can range from 10 to 15 percent.
“We have a long history of corn production in Ohio; it was stagnant, with a $2 price mark for many years, that’s where it was sort of stuck,” Nicholson said. “The only way to get out of that with a grain commodity like corn is to increase demand. That’s what we set out to do, was create a demand in 2008. It was the end result of a lot of work by the agricultural community, investment and research to make corn ethanol cost effective with a gasoline counterpart, and we did that and surpassed that, making it less expensive.”
Creating a higher demand allowed producers to create a higher supply, using advancing technology in genetically-modified organisms (GMO) and in seeds, Nicholson commented, as well as coming up with better production practices overall, he added.
“There are a lot of ways to continue improving production practices to increase the amount of corn produced on an acre,” Nicholson noted. “That’s what allowed us to supply this new demand for corn, and helped us to maintain other markets, as well.”
The Andersons, Inc. has a plant located outside of Greenville, which uses around 40 million bushels of corn grown within a 50-60 mile radius of Darke County, McKinstray noted.
Of that 40 million bushels, only the white center of the corn kernel is used to produce ethanol, the rest “comes out the back end,” to supply a livestock feed that is rich in protein, vitamins and fiber, and is a viable source of feed for all livestock, said Nicholson, this feed is called dry distillers grain (DDG)
Darke County leads the state in corn production, reported Sam Custer, agriculture and natural resources educator for The Ohio State University Extension Office, Darke County. Corn ethanol production provides an avenue for sales, he said, and he doesn’t see that DDG is completely off-setting the difference in feed. Ultimately, he said, this is costing livestock farmers in their bottom line, because they’re paying higher prices for corn-based feed.
“The downside, that I can see, is that [ethanol] has driven corn prices up, which affects the bottom line for livestock farmers,” Custer noted. “I do not see that the DDGs completely offset that.”
“Two benefits I see are the additional market and use of a product grown here in the county,” he continued. “Secondly, there’s the continued movement toward less dependence on fossil fuels.”
Ethanol is a renewable source of energy, Nicholson noted, so finding ways to produce fuel is a “continual evolution of innovation,” said Nicholson. Ethanol has been around for more than 25 years, but research is still in its infancy, he stated.
“We’re learning how to squeeze more ethanol out of a bushel; there’s still room for improvement and efficiency,” Nicholson noted. “Innovations are still yet to come, and it’s such a great success story. It’s not just home grown fuel, it’s renewable, we can grow this every year. It’s also cleaner burning, not only in the cars, but in the production process, we can make that cleaner, and lower our impact on the environment. These are all fantastic success stories.”
When the ethanol plant was put in just east of Greenville in 2008, it was a nearly $200 million project, McKinstray noted; and while the plant only employees about 45 people, Continental Carbonics, which chose its location based on the ethanol plant, employs approximately 70, he said.
However, the “rapid ramp-up” of the ethanol industry has tapered off, Nicholson noted.
“It happened very quickly,” Nicholson noted. “It was a shock to the market; corn prices really shot up hard, but they eventually tapered out to where the plateau ought to be. [Ohio] is in the mid-range for corn prices; it’s still profitable for corn farmers, livestock feed and ethanol.”
The future of ethanol is turning to other cellulose-based materials, but that method is still where corn ethanol was 25 years ago, Nicholson noted, in its infancy. The industry is keeping an eye on government policy, still, despite not moving forward with production growth, Nicholson noted, because policies that keep petroleum from being a monopoly by requiring alternative blends, are being threatened.
“It could be a very big mistake if changes are made to that policy,” Nicholson said. “If policy changes are made to give that monopoly back to the petroleum industry, it would halt innovation, and that’s just not what America is about.”