Bush intent on biofuels binge
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BY ART HOVEY / Lincoln Journal Star
Some federal policy-makers have talked about producing 25 billion gallons of ethanol in the United States by 2020, or 35 billion gallons by 2030.
President Bush trumped them all Tuesday night by calling for 35 billion gallons by 2017 in his State of the Union speech. That 10-year goal represents an increase of almost 500 percent in what Congress has sought for renewable fuels by 2012.
Not surprisingly, Nebraska’s governor and the administrator of the Nebraska Ethanol Board reacted as if Christmas had come a month late.
“I think it’s great news for America and it’s great news for Nebraska,” said Gov. Dave Heineman. “Nebraska is a leader in ethanol production and we welcome an opportunity to do even more.”
In promoting a more aggressive energy policy, the president also wants to step up domestic oil production and upgrade fuel economy standards on the highway.
But the multibillion-dollar impact of such a huge ethanol mandate will matter much more to many Nebraskans.
Todd Sneller of the Ethanol Board said it means even higher demand for construction workers who are already building plants across the state at an all-out pace.
It means more demand for people with the technical skills to work in ethanol plants, and it raises the possibility for building pipelines dedicated to moving the grain-based fuel.
In broader perspective, Sneller said, “this will serve as a catalyst for the next wave of ethanol production, not only in Nebraska but nationally.”
In a state with so many ethanol cheerleaders, it’s not easy to find balancing perspective on what it all means.
But Lincoln commodities trader Doug Carper does not wear an E on his sweater.
“You can’t really have this conversation without being booed and hissed,” he said in offering a more skeptical view prior to the president’s speech.
“But the reality is this program was created by politics. It’s driven by politics and by the desire of this country to imagine — that’s the key word there — imagine a way to be energy self-sufficient and meet clean-air standards while we’re at it.”
It’s a pipe dream, Carper added. “It’s not going to happen.”
Converting every bushel of corn in the country to ethanol won’t make much of a dent in the country’s energy needs, he said. Corn is also needed for food and livestock feed.
And Nebraska faces an extra challenge, because, unlike Iowa or Illinois, most of its corn is being raised with irrigation at a time of drought and dropping water tables.
Heineman and Sneller predict the state will find the proper balance between raising more corn and conserving water.
“This is a situation where opportunity is striking and we as a state need to take advantage of it,” Heineman said.
The combination of water, corn and cattle that eat ethanol byproducts give the state an edge over any other state, he said.
“No one is better prepared to take advantage of increased ethanol production than Nebraska.”
Sneller said converting wheat and alfalfa acres to corn was one way to keep up with the demand.
Away from the cornfields, one of the big challenges attached to the Bush speech will be in getting more people to choose 85 percent ethanol blends for flex-fuel cars and trucks.
Rob Crumbliss of Seward’s Chrysler-Dodge-Jeep dealership said that could take some work.
U.S. automakers dramatically increased the number and variety of vehicles that can burn E-85 in 2007, Crumbliss said. So far, the customer response has not been nearly as dramatic.
“We have a few people who come in and ask” about flex-fuel purchases, he said. “I would say maybe one out of every 15 or 20 will ask about them.”
More often, a customer will end up with a vehicle capable of burning E-85, but not necessarily destined to use it.
One reason is the dearth of service stations in Nebraska that sell it. The most current count, said Steve Sorum of the Nebraska Ethanol Board, is fewer than 30 statewide, with about half a dozen, combined, in Lincoln and Omaha.
Coupled with that are the much more modest performance in miles per gallon and prices that many drivers would regard as less than competitive with unleaded gasoline and 10 percent ethanol blends.
Why is E-85 such a non-factor in the biggest cities in such a big ethanol state?
Said Sorum: “The ethanol plants that have subsidized the fuel by providing it at a much lower cost have done so in their own communities. That’s a big part of it.”
Reach Art Hovey at (402) 523-4949 or ahovey@alltel.net.
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