Ethanol Output Soon Will Equal Iowa Gas Input

By Dave DeWitte, The Gazette, Cedar Rapids, Iowa

Feb. 18–Ethanol disciples are counting down to a major milestone late this summer, when output from Iowa ethanol plants equals the amount of petroleum-based gasoline Iowans consume.

Iowa will reach annual production capacity of 1.6 billion gallons of ethanol after more than 500 million gallons of annual production capacity is brought on-line in the state this year, according to Monty Shaw, Iowa Renewable Fuels Association executive director. Iowans use about 1.5 billion gallons of petroleum-based gasoline in their vehicles each year, Shaw said.

Iowa is the top ethanol-producing state, with production of about 1.1 billion gallons, outstripping No. 2 ethanol producer Illinois, and No. 3 Nebraska.

Iowa is likely to be the first state to reach the milestone, Shaw said.

Twenty-one ethanol plants operate in Iowa, Shaw said, and six plants under construction are expected to be in operation by the end of the year. Two plant expansions are slated for completion this year.

Those numbers don’t include plants that are adding output through efficiency improvements.

Ethanol production has received a tail wind from the renewable fuels standard in the 2005 federal energy bill, which required that 5 billion gallons of renewable fuel be blended into the nation’s fuel supply and eliminated the reformulated gasoline oxygen requirement.

Most of the nation’s growing appetite for ethanol comes from areas of New York and California struggling with air pollution compliance. Shaw said roughly 40 percent of the gasoline sold in the United States this year will be ethanol blend, versus 33 percent in 2005.

The investment climate for ethanol is so strong that drives to raise equity to build ethanol plants are often fully subscribed in a matter of days, rather than the months it could take in earlier years, said Rick Schwarck of St. Ansgar, president of the Absolute Energy ethanol venture announced recently in Mitchell County. Schwarck said the strong investment interest in ethanol has made it harder for ethanol ventures to ensure that local investors who want to participate all get the chance.

Shaw agreed.

“There’ve been good returns the last few years, and when you have that you start attracting the big venture capital and that kind of thing,” Shaw said. He expects the investment fervor to cool eventually, as more than 2 billion gallons of ethanol capacity is planned or under construction nationwide. º Contact the writer: (319) 398-8317 or david.dewitte@gazettecommunications.com

BY THE NUMBERS:

–1.5 billion Gallons of petroleum-based gasoline Iowans consume annually 1.1 billion Gallons of annual ethanol production capacity in Iowa, the No. 1 ethanol-producing state 500 million Gallons of annual ethanol capacity being brought on-line in Iowa this year Dave DeWitte

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