Iowa has encouraged ethanol

Five ethanol plants currently under construction in Hawkeye State
By | April 01, 2002
In terms of ethanol production, the 490 million gallons per year produced in Iowa is second only to Illinois. And with 5 plants under construction, 8 producing, and another set to break ground soon, Iowa may soon share with Minnesota the distinction of having 14 ethanol plants.

Of course, there is work to be done before that claim to fame can be made. Five of the seven ethanol plants that broke ground in Iowa last year remain under construction. When finished, however, the Hawkeye State will be a mighty ethanol powerhouse, with the capacity to produce over 645 mmgy.

The construction boom
The ethanol plant construction frenzy peaked last year after the Bush administration denied California's request for a waiver from the clean air requirements. In March, the ethanol rush in Iowa may have been temporarily set back when California Gov. Gray Davis delayed the ban on MTBE until 2004. However, said Iowa Corn Growers Association Marketing Director Lucy Norton, the construction has not halted in Iowa.

"We have not seen any changes in plans or attitudes since (Gov. Davis) delayed the MTBE ban in California," Norton told Ethanol Producer Magazine. "We still have huge markets in the Northeast that need ethanol and the pending RFS legislation looks very promising. . . This nation needs more ethanol. Producers are not totally dependent on California."

Norton said Iowa producers are increasingly looking to new lucrative markets - such as e-diesel - that hold great promise. The Iowa Corn Growers Association recently became part of the E-Diesel Consortium with the Illinois Corn Growers Association and the Renewable Fuels Association, she said.

Attractive ethanol state
Why is Iowa a great state to make ethanol?

"It's a number of things," Norton explained. "Low commodity prices, increasing profitability, growing statewide interest in value-added ag processing and an environment that promotes ethanol production and use.

Serious development of an ethanol industry in Iowa began more than 20 years ago when state law-makers realized that renewable fuel represented a strong new market for Iowa's corn crop. Several policies were established to encourage consumption, including a mandate for government vehicles to use ethanol-blended fuel, and tax exemptions to help make ethanol competitive with gasoline. Iowa provides a one-cent-per-gallon fuel sales tax exemption for ethanol-blends.

Iowa's current ethanol producers are:-ADM - 400 mmgy
-Cargill - 35 mmgy-
-Sunrise Energy - 5 mmgy
-Manildra Ethanol - 7 mmgy
-Grain Processing Corp. - 10 mmgy
-Permate Refining - 1.5 mmgy
-Siouxland Energy - 14 mmgy
-Quad County Corn Processors - 18 mmgy

Iowa's five plants under construction are:
-Tall Corn Ethanol - 40 mmgy
-Midwest Grain Processors - 45 mmgy
-Little Sioux Corn Processors - 40 mmgy
-Northeast Iowa Ethanol - 15 mmgy
-Pine Lake Ethanol - 14 mmgy

Ethanol exporter"Iowa is a huge net exporter of ethanol," Norton said. "We produce largely for the national market, as well as our own market. 80 percent of the ethanol produced here is still exported."

According to the Iowa Department of Revenue and Finance, Iowa motorists choose ethanol-blended fuel 42 percent of the time when fueling their vehicles. This consumer activity, along with Iowa's commercial production, promotional efforts and ongoing research and development, are helping Iowa realize tremendous economic and environmental gains from ethanol. According to the Iowa Corn Growers Association, 54 percent of the gasoline sold in Iowa is blended with ethanol.

Distillers Grains Market
In Iowa, there has been limited DDGS development because up until now, most of ethanol produced in the state was wet milled by ADM and Cargill. But with the new production coming online - all dry mill production - there will be more DDGS to deal with and the need for an education process in Iowa DDGS markets. The abundance of this feed may increase the livestock numbers in Iowa as well and expand livestock production, Norton said.