Ethanol booming in Minnesota, however, experts issue warnings

REDWOOD FALLS -- Nancy toured an ethanol plant. In her cowboy boots, she looked around a facility that will turn poultry manure into electricity. She sang the praises of farm-based renewable energy.

REDWOOD FALLS -- Nancy toured an ethanol plant. In her cowboy boots, she looked around a facility that will turn poultry manure into electricity. She sang the praises of farm-based renewable energy.

This is not farmer Nancy. This is Nancy Pelosi, the U.S. House Democratic leader from San Francisco. And her Texas-made boots never had seen a barnyard; they were shiny black, stamped with the U.S. House seal.

"I have been to Minnesota and I have seen the future," Pelosi declared.

Increasing ethanol use needs to be a national priority, she added. Her comments come on the heels of Ford and Chevrolet ratcheting up their support for corn-based ethanol in a barrage of television commercials.

Minnesota and other Midwestern states are in the middle of an ethanol boom, with new production facilities sprouting up as fast as corn does on a rainy spring day.


"There is a bit of a gold rush going on," said Tim Gerlach of the American Lung Association.

But some warn that farmers and agri-businesses need to keep looking for something new.

"What we see now with ethanol cannot last," Steve Taff told hundreds of farmers at FarmFest last week.

Taff, a University of Minnesota economist, and other ethanol experts say new plant materials will replace corn as the raw ingredient for ethanol, and warn farmers to be prepared.

As more and more corn is used to make the renewable fuel, corn prices will rise, Taff said. When the price goes up too much, other sources will become more economically viable ingredients. Then corn will be used less and its price will fall.

"We need to be ready when the next big thing comes down the pike," Taff said.

Minnesota Agriculture Commissioner Gene Hugoson said within five to 10 years, plants such a switch grass may be the main ethanol ingredient.

Until then, the corn ethanol boom probably will continue, although Bill Lee of Chippewa Valley Ethanol in Benson said questions remain. One is whether a national E-85 market will develop. He also suggested looking into gasoline blends with 20 percent or 30 percent ethanol, which would require federal approval.


Most ethanol plants today are run by farmer-owned cooperatives. But with the product making a profit, Lee said bigger companies are looking at getting involved, something many farmers fear.

Minnesota leads the country in ethanol use. The state is home to 16 ethanol plants that produce more than 400 million gallons a year.

Pelosi said increasing ethanol, biodiesel, wind power and other renewable energy use is a high priority of her Democratic members in the House and should be something agreed on by all members of Congress.

In a Feb. 2 Minnesota visit, President Bush urged increased use of ethanol.

With Republican Bush and Democrat Pelosi preaching the same sermon, it would seem ethanol's future is bright nationally.

Hugoson thinks so.

"Until last year, Minnesota stood alone in this business," Hugoson said. "Now, the demand is outpacing the supply."

Minnesota requires most gasoline sold in the state to contain 10 percent ethanol, and another law requires the state to increase total ethanol use.


One of the biggest growth areas is E-85, which contains 85 percent ethanol and 15 percent gasoline. Minnesota has about 260 E-85 pumps, nearly half the pumps in the country. Ford and Chevy, especially, are promoting their flex-fuel vehicles that can burn E-85 or regular gasoline.

On Friday, Gov. Tim Pawlenty announced that Minnesota State University, Mankato, will study kits to convert normal gasoline-burning vehicles to use E-85. There are few differences between flex-fuel and regular vehicles, mostly some tubing and joints that may corrode if E-85 is used in cars not designed for it.

Pawlenty has sought federal permission to sell the conversion kits in Minnesota.

Speaking to reporters at FarmFest, the governor also said he would promote legislation to make it easier for stations to sell E-85. He said some stations have contracts with big oil companies that do not allow E-85 sales.

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