SIOUX FALLS, S.D. (AP) -- Two of the nation's top ethanol producers praised the new energy bill on Friday, saying mandates requiring higher use of the alternative fuel will help the United States move toward energy independence.
Company executives and industry leaders met with Sen. John Thune, R-S.D., to celebrate this week's bill signing during a brief meeting Friday at the South Dakota Corn Utilization Council offices in Sioux Falls.
The new legislation requires refineries to increase the use of ethanol from about 6 billion gallons a year this year to 36 billion gallons by 2022. It also mandates that by then at least 21 billion gallons are to come from feedstocks other than corn.
That cellulosic ethanol provision will help firms such as Sioux Falls-based Poet, the nation's largest ethanol producer. Poet has been investing heavily in new processes to produce ethanol not only from corn, but also from the cobs and stalks normally left behind in the fields, said Jeff Broin, Poet's president and chief executive officer.
"Perhaps most importantly, this legislation provides a launching pad for the next generation of biofuels, cellulosic ethanol," Broin said. "By guaranteeing a market, this law gives confidence to companies like ours that are making large investments in new technologies."
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South Dakota's other major ethanol producer, VeraSun Energy Corp., is also looking to expand beyond traditional corn-based ethanol.
The Brookings-based company is building an oil extraction facility at its 120 million-gallon-per-year Aurora plant that will yield between 7 million and 8 million gallons of corn oil each year from 390,000 tons of distillers grains, an ethanol byproduct used as a livestock feed.
Don Endres, VeraSun's chairman and chief executive officer, said the new energy bill sends a clear message to investors that the biofuels industry is here to say.
But Endres said it also will benefit oil refiners, many of which are looking to make fuel from heavier crude extracted from areas such as the Alberta oil sands of northern Canada. Refiners must make significant investments to upgrade their facilities, and having more ethanol to blend with that fuel will help, Endres said.
"It provides a safety net for industry so more capital will flow in and more high octane, clean ethanol will be produced, and that's good for refiners," Endres said.
About half of the gasoline sold across the United States is blended with 10 percent ethanol, but Thune said he would like to see that percentage increased at the pumps to a 20-percent mixture.
"We now have to continue growing this market, and that means increasing the blends," he said.
Thune, while attending President Bush's bill signing ceremony on Wednesday, talked with Energy Secretary Samuel Bodman and Environmental Protection Agency Administrator Steve Johnson about completing their agencies' studies of higher blends such as E-20. Using a 20-percent blend could increase ethanol demand incrementally until car companies can produce enough special flexible fuel vehicles to make an E-85 fuel the norm.
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"Both agencies right now are doing studies," he said.
South Dakota already has variable blender pumps at some locations, and with the EPA's approval, the state could serve as a regional pilot project for the wider use of higher blends, Thune added.
Lisa Richardson, executive director of the South Dakota Corn Utilization Council, said the energy bill will help boost the economy not only for corn growers, but for the entire state.
Richardson said producers will step up to produce enough corn and cellulosic feedstocks to supply both the food and fuel industries.
