EPM asked the world's leading ethanol plant builders and technology providers to evaluate U.S. ethanol plant construction. Our questions: Where will the next phase of building take place, how will new competition affect the industry, and how long will the boom last?

Ethanol Plant Construction in America How Long will the Boom Last?

Recently, one of the most intriguing avenues of international ethanol plant design and construction is the advent of the 100-mmgy dry mill. Large ethanol dry mills are not unprecedented - ADM and New Energy Corp. have run sizeable facilities for years - but new plants with nameplate capacities over 40-mmgy have typically not been viable options for investors, until now.
 	
 Today, leading technology providers and construction companies are setting their sights on colossal projects in the United States, China and elsewhere. Vogelbusch, a longtime ethanol industry technology provider, is supplying the process-design for a massive 200-mmgy dry mill in the Jilin province of China. Vogelbusch U.S.A., Inc., the company's American division, is providing the process-design to Nordic Biofuels, a proposed 80-mmgy project that will soon break ground in Nebraska. What's more, Fagen, Inc., utilizing an ICM, Inc. process-design, is already building a 100-mmgy dry mill in Aurora, S.D., for VeraSun Energy. Likewise, Delta-T Corp., along with its new partners TIC and T.E. Ibberson Co., is in talks with private investors planning to build a 110-mmgy plant at an undisclosed location in the United States. 
 	
 These developments, and others, lead industry analysts to wonder if 100-mmgy dry mills are becoming the industry's new standard-sized plant. If so, what impact will this building trend have on the industry?
 	
 According to Ron Fagen, CEO of Fagen, Inc., it may be too early to tell how the industry will react to the advent of 100-mmgy dry mills. But just because an ethanol plant starts out at 40-mmgy does not mean it will not eventually produce 80 to 100-mmgy, he told EPM. 
 	
 "As everyone knows, the economies of scale in ethanol plant building have never been more important than now," Fagen said. "Farmer groups typically would not be able to raise the equity for a 100-million-gallon facility, but I think you will see many of these new (40-mmgy) plants being built today later being expanded to near the 100-million-gallon mark. They will not start out at that level but they can take steps to get there."

 	
 However, there are very few areas in the United States that have the grain supply to support 100-million-gallon plants, according to Jeff Broin, CEO of The Broin Companies. "Too much corn demand in an area narrows corn basis and decreases plant profitability," he told EPM. "In my opinion, the economy of scale gained from 50 million gallons to 100 million gallons is not sufficient to offset corn price changes in most locations."
 	
 Rob Swain, vice president and CFO of Delta-T Corp., concurred with ICM, Inc. CEO Dave Vander Griend, who said he foresees at least five 100-mmgy plants being built in the United States before the end of the decade.
 	
 "These giant dry mills are not actually different by design," Swain said. "But it's usually difficult to entice investors and raise the kind of money needed for a project of that size. It's too big a leap for your typical co-op investor group." 
 	
 Swain said the ethanol industry's "body of history" makes the 100-mmgy plant a fairly reasonable step up for deep-pocket investors. "Most agree, if money is unlimited, or in great supply, 100-mmgy is the way to go," he told EPM. "These plants are creatures of economies of scale. But at some point you have to determine if it makes sense to go bigger. . . Does the reward tail off? Maybe. A better question might be why stop at 100? Why not 200 or 300 million gallons a year? There's a point, probably, where you can build too large?" 
 	
 True, said Fagen, who suggested that from today's perspective, building ethanol dry mills way over the 100-mmgy mark is not viable. "You could see the economies of scale reverse if you build too large," he explained. 
 	
 Dan Mahon, manager of technical services for Vogelbusch U.S.A., reminded EPM that the final determination of plant size is dependent on the availability of cheap feedstock. A large plant near large quantities of grain makes sense., he said. Whereas a large facility located where much of the grain must be brought in from long distances does not make sense, no matter how low a cost per annual capacity gallon the facility is built for.
 	
 "What's amazing is the infrastructure needed to handle these huge plants - especially above 100-mmgy" Swain said. "You need high-speed unloading with four or five stations and a literal freeway coming to and from the plant." EP

Are 100-mmgy ethanol plants becoming the industry's new standard? Perhaps, but it's still too early to tell, design-builders say.

Advent of the Giant Dry Mills

As one Aussie analyst recently told EPM, ethanol production in Australia is in its infancy. It's struggling for identity and battling the same misinformation campaigns U.S. producers faced a decade ago. 
 	
 Helen Carr, director of Ethanol Australia Pty. Ltd., told EPM the ethanol debate has been dragged through the Australian press and parliament over the past twelve months. 

 	
 "If asked the question: 'What do you know about Ethanol?,'" she said, "most Australians would have said 'Ethan Ol'? Don't know 'em, mate!.' Ask the same question today and, as BP discovered in a national survey, many Australians would consider ethanol to be a product that will destroy fuel systems and void warranties on vehicles. Mud sticks." 
 
 Is Australia 20 Years Behind U.S.?
 The Australian ethanol misinformation quagmire is all too familiar to the American ethanol industry, which is finally starting to win the information battle that's been raging for over 20 years. Last year, a chief executive officer of Australian Biofuels said Australia was up to two decades behind the United States and Brazil in terms of production and consumer acceptance. EPM asked a few of Australia's ethanol industry leaders if that statement holds true today.
 	
 "It seemed that way at the time (last year) because of a lack of a market involving oil companies and all the negative press," said Bill Wells, industry consultant and president of Wells Enterprises International. "However, with the right package of federal framework and incentives, this ground could be made up very quickly. We have mounted a heavy campaign to reverse the negative press and we are making headway."
 	
 It is the aim of ethanol proponents in Australia to have 10 percent ethanol in all its gasoline within 15 years, and that goal is reachable, Wells told EPM. "Hopefully, the oil companies will get on board and do this in a controlled but steady fashion voluntarily, but we think the government is prepared to enforce introduction if progress is not made," he said. "The feedstocks and infrastructure are there. Behind the scenes, we are assured that the current government is working toward that goal. . . by this June."
 	
 Steve Schuck, manager of Bioenergy Australia, said "I don't believe we are set back 20 years, but the industry has certainly been damaged for a while." (Note: While preparing his answers for this article, Schuck told EPM, the Minister for the Environment announced that ethanol blends in Australia would be capped at 10 percent, and labeling would be compulsory).
 	
 Brett Kuskopf, project manager for ethanol development for CSR Sugar in Australia, said the battles fought in the United States and Brazil gives Australian producers an advantage. 
 	
 "Obviously, we are lagging the United States and Brazil in terms of actual production and a well defined legislative framework for Biofuels in Australia, but we have the advantage of starting from a more informed position. So, provided we take the time to involve all the relevant stakeholders, there is the potential to develop a substantial and sustainable fuel ethanol industry in Australia in a relatively short time frame, without suffering the setbacks experienced in both Brazil and the United States during their 20 years of development."
 

 Oil Industry Influence & Control 
 John Anderson, deputy prime minister of Australia, was quoted a few months ago as saying, "The other side of the coin is that I do call on people, including. . . some of the petrol companies, who are engaging in a lot of advertising that suggests that they think it's a good thing to discourage people from using ethanol. They are the same companies who are all using ethanol and promoting the use of ethanol in countries like America, the very same ones."
 	
 Considering this statement, EPM asked, how much control and influence does the oil industry have on the growth of the ethanol industry in Australia? 
 	
 "It is hard to say why they would make statements like that, especially given the (growing) acceptance of ethanol by their U.S. affiliates or parents," Wells responded. "To be fair, I also hear companies like BP say publicly that the only reason they canceled their E10 program in Brisbane is because of the negative press for E20 and higher blends in the southeastern regions of Australia. They say E10 is good petrol, but it was getting painted by the same brush as E20, and sales were beginning to drop because of public perception that maybe something was wrong with ethanol."
 	
 Of course, Wells said, there is another reason as seen in the "30,000 foot view." He said oil companies control the fuel supply to a large extent in Australia, and "they will want to see if they can exercise as much control over the introduction of ethanol blends as they can." 
 	
 Schuck said, "The oil majors in Australia seem to be very protective of their turf. They would not want to lose market share. Also at the moment they use zero cost butane backed into the fuel. If ethanol were to be mandated, they would have to back this off to maintain Reid vapour pressures. Photochemical smog is a growing problem, especially in Southeast Queensland and Sydney. The oil majors - possibly not BP - and the motor manufacturers seem to have taken a common line."
 	
 Kuskopf agreed, saying, "There is no doubt the oil companies in Australia have had, and will continue to have, a significant impact on the future of the ethanol industry in Australia. Like any industry, there are both supporters and detractors present that will each be heard by the policy makers and in the market place from time to time. The actions of the oil companie, for example, placing 'No Ethanol in our Petrol' signs on their petrol bowsers during the recent negative campaign against fuel ethanol blends to supposedly 'inform' fearful customers, seems to contradict their 'reserved' public support for ethanol. . . and it is very disappointing to an ethanol advocate like myself. 
 	
 "However, it must be remembered that they are making business decisions and they are unlikely to wish to participate in the growth of the fuel ethanol industry unless it makes economic sense to them. Dragging them along kicking and screaming through a mandate would achieve some basic objectives for ethanol producers, but it would not create a lot of mutual goodwill." 
 

 Labeling Friend or Foe?
 Australia is considering a number of ideas that have been implemented to increase the use of ethanol and decrease Australia's dependence on foreign oil. Some officials are pushing for a 10 percent ethanol mandate. A 38 cent-per-liter producer subsidy has replaced the 38 cent-per-liter excise tax exemption, and there has been a push for national labeling legislation such as is already being done in Victoria. 
 	
 But how does the Australian ethanol industry feel about these programs, especially a national pump labeling campaign?
 	
 "Ethanol proponents here are split over the issue of labeling ethanol, although all agree that it should not be a warning or ominous label in any sense," Wells said. "We have had labeling in the United States forever and we have learned to live with it just fine. In fact, in California it is a tool to tell consumers that MTBE is not present. Clearly, when we get to a situation where 10-percent ethanol is everywhere, then there is no point in labeling, but my personal opinion is that now it is necessary to let the consumer know which blends are present so they can make an informed choice at the pump."
 	
 "Labeling is a double edged sword, Kuskopf said. "If the majority of the public has a positive view about ethanol in fuel - meaning it is seen as an acceptable fuel with added environmental and regional development benefits - then labeling could enhance its presence in the market. On the other hand, if there are overly negative perceptions by the public, it may have the reverse effect. In essence, if you have effective fuel standards and a 10-percent cap on ethanol, labeling is unnecessary." EP

Ethanol has been dragged through the mud in theAustralian press over the past twelve months. U.S.producers overcame the same odds. Will they prevail Down Under?

Fledgling Australian Industry Battles Misinformation

The ethanol industry isn't just growing. It's growing up. 

 	
 As ethanol plant building and expansion surges to keep pace with demand, the industry is making use of increasingly sophisticated technology, engineering, and construction. 
 	
 The farmer co-ops continue to be important investors. "Board members still have hands rough from field work," says Mike Bryan, industry analyst and president of BBI International. 
 	
 Yet corporations and private investors are also being attracted to new opportunities to harvest sizeable returns on their money. And larger players, like construction companies, are seizing the chance to bring their capabilities and resources to an industry continually setting high professional standards for itself. 
 	
 The latest example is the announcement by Delta-T Corporation of its new partnership with TIC (The Industrial Company) and T. E. Ibberson Company. The partners will focus on designing and building ethanol plants throughout North America. Delta-T will design the process technology and procure the process equipment, TIC will be the EPC contractor and build most of the plant, and Ibberson will provide the detail engineering and construct the grain handling and DDGS load-out systems. 
 	
 TIC brings considerable heft and leverage to the industry. Founded in 1974 and headquartered in Steamboat Springs, Colo., TIC has quietly grown into a powerhouse in American construction. Its annual revenues now exceed one billion dollars, ranking it 38th among all U.S. industrial construction companies, according to the most recent report (using 2001 figures) by Engineering News Record. 
 	
 More relevant to the ethanol industry, TIC ranks 13th in refinery and petrochemical plant construction, sixth in power plant construction, and sixth in wastewater treatment plants. Its ethanol plant experience includes construction for Minnesota Corn Processors. TIC operates in Mexico, Canada, and all 50 of the U.S. states, as well as internationally. 
 
 Shared Values, Complementary Expertise
 Important to Rob Swain, vice president of Delta-T, are "not just TIC's great size, scope, financial strength, and construction capabilities. What delights me is how harmoniously both TIC and Ibberson fit with Delta-T. It's like the synchronized meshing of three gears. Our cultures, our core values, our expertise all complement one another."
 	

 "TIC is passionately driven by our core values," says Al Knapp, TIC senior vice president. "We were looking for a process designer who brought the same level of integrity to the table. And Delta-T practices the high ethics we look for in our partners. We think we have a real cultural match."
 	
 TIC first worked with Ibberson in 1995. The two formed a permanent joint venture in 1999 and have established what both call "a strong working relationship" over the years. Like TIC, Ibberson also emphasizes the importance of like-minded corporate cultures in the new partnership. Steve Schmitt, vice president of Ibberson, says: "When TIC, Ibberson, and Delta-T were exploring the opportunity to get together, we discovered that all three of us have a strongly ingrained set of core values. And we saw an excellent fit with Delta-T." 
 	 
 "Each company will do what it does best," says Delta-T's Rob Swain. "Delta-T is now free to concentrate more of its resources on continually improving and innovating the process design for ethanol plants. And to get everything else done and done right, we'll be working with people we like and respect and trust. 
 	
 "Size matters. TIC has the financial strength and bonding capacity to let us build a dozen ethanol plants simultaneously. Yet what counts in the end isn't how big our partners are. It's how good." 
 The Search for a Technology Partner 
 	
 After TIC made a strategic decision to enter the ethanol industry, the company began the search for the right partner. According to Al Knapp, it was Delta-T's reputation in ethanol process design that first attracted TIC. "We looked at basically all the technology providers and we felt that Delta-T was the one that we wanted to do business with," he said. "They have surprising sophistication for a smaller company. One of the things we liked most about Delta-T was, of course, their technology overall. There's a lot of technology out there today that focuses too much on capital cost at the expense of operating costs. 
 	
 "We all know that capital cost is a big deal when you're trying to get a project financed. But getting it financed and built is not the bottom line. The bottom line is, what's your return on investment? What we see in the Delta-T technology convinces us that Delta-T design will lead to a much lower operating cost and a longer operating life. And as ethanol plant owners get more and more sophisticated, they're going to recognize how important that is."
 
 'This Elephant Can Tango'
 Yet even as he stresses low operating cost, Knapp takes care to emphasize the cost-efficiency of TIC's management methods. "You can't be some clumsy behemoth with a huge overhead and huge profit margin."
 	

 "This elephant can tango" is how Swain puts it. "TIC can build a plant every bit as inexpensively as the smaller construction companies." 
 	
 Although TIC has the management depth and resources and experience to handle large projects - it routinely builds $300-400 million plants - a large amount of the work it does is actually done on a very small scale by very few workers. 
 	
 "When our 2001 revenues topped a billion dollars," Knapp points out, "82% of the contracts signed were for projects $2 million and less. We might have ten people on a job-or a thousand. We pride ourselves on being able to do both large and small projects on a highly competitive basis." 
 	
 How does TIC keep competitive? The more control it has over the project, the more control it has over the costs. Knapp cites several key factors in establishing that control. 
 	
 Wherever possible, TIC self-performs 70 to 80 percent of the work and sub-contracts the rest locally. To assure consistent standards of quality, and emphasize the safety so important for meeting OSHA requirements, all its people go through extensive TIC-designed training, and not only its crafts people but also all of its supervisory people, from the front-line to project manager level. This program involves "the details of scheduling, cost control, documentation, procurement, warehousing, productivity, on and on and on," says Knapp. 
 	
 By organizing the company by regions, TIC people are within four to six hours of almost any job site in North America. So while they often stay overnight near the site, they can go home on weekends. 
 	
 This regional organization, combined with TIC's size and financial strength and logistical experience, means it can easily build four to five ethanol plants simultaneously in any part of North America. 
 
 Experts in Food and Grain Handling

 T. E. Ibberson Company, based in Hopkins, Minn., brings a different set of experiences and skills to the partnership. Ibberson has over a century of engineering and construction expertise in food processing and grain handling and has completed over 3,500 projects worldwide. Many U.S. readers will be familiar with its grain and feed facilities for companies like Purina and Cargill. It's also had prior experience in the ethanol industry for projects such as Adkins Energy and Badger State, and Midwest Energy. 
 	
 But one of Ibberson's most significant projects is almost unknown here. In China, the company designed a major portion of the world's largest grain elevator. 
 	
 "This kind of world-class expertise and experience, combined with their broad engineering resources, is what Delta-T finds so valuable," says Rob Swain. 
 	
 Ibberson's Steve Schmitt explains that his people will provide "the overall engineering wrap on the entire project to take a Delta-T process-design and get it into a ready-for-construction effort that can be efficiently built in a fast-track environment."
 	
 Beyond that, Schmitt adds, "We've had the experience of receiving, storing, and milling grain for the front end of the ethanol plant. . . and for storage, transfer, and load-out of DDGS from the back end of the ethanol plant. Things we've been doing for over 120 years. So we bring the technology and know-how to do that cost-efficiently."
 
 The Challenge to Change
 TIC, Ibberson, and Delta-T all look forward to the demands and opportunities of a growing, changing industry. There's a lot of work to do, and they're rolling up their sleeves, as Steve Schmitt says, "to accept the challenge to do it smarter, better, faster."
 	
 Jim Evangelow, consultant for Chemical Strategies, takes the long view of growth and change. Looking back across a quarter-century of analyzing the production of ethanol, he says, "It's become a real industry." He traces how far the industry has come since just the mid '90s, and says, "Ethanol is here to stay. It's the fastest growing commodity chemical in the United States. We're going to have a five billion gallon market by 2012." EP

TIC brings new level of capability to industry, signaling more change

Delta-T Partners with $1 Billion Construction Contractor

Mid-Missouri Energy, a farmer-based group of investors organizing to build in central Missouri, announced this month that it has chosen a site for its proposed 40-mmgy facility and extended its equity offering through the end of May. 
 	
 Countering its previous announcement to build near the town of Carrollton, Mo., the group now says it will build near Malta Bend, Mo. "The site committee's recommendation of the Malta Bend site was unanimous," said MME President Ryland Utlaut. "It's not set in stone, but it looks like Malta Bend is where we will build the plant."
 Fagen, Inc., MME's choice EPC design-builder for the project, supports MME's decision to build near Malta Bend because, Utlaut said, they have determined that less site preparation would be needed there. "(Malta Bend) was Fagen's preference - and ultimately ours - but they said they would build the plant at either site," Utlaut said. 
 	
 In addition to less site preparation, the Malta Bend site does not require a new access road, as the Carrollton site does, the MME president said, and opposition to the project by a Carroll County, Mo., resident stood to delay the project at the formerly preferred site.
 	
 Early this month, MME announced that it had extended its equity offering an additional 60 days, through May, even though corn producers investing in the project reached between $16.5 and $17.0 million in the first round of equity offerings. 
 	
 "We are ecstatic over these results," Utlaut said. "We are told that $15.3 million is the most any ethanol project in the nation has raised in their initial equity drive. For us to have surpassed that record is nothing short of amazing,. The $12 million mark was needed in order to be 51 percent farmer-owned, the requirement of Missouri's state incentives for ethanol production."
 	
 MME Treasurer Ron Linneman recalls the board thinking $12 million was a tremendous challenge when they started. "To think that producers have responded well beyond the $12 million mark really speaks to the potential out there," Linneman said. 
 	
 After the first phase of the equity drive, MME's board of directors saw the potential to make the ethanol project a 100 percent farmer-owned plant. In fact, the board expressed the desire throughout the equity drive to be 100 percent farmer-owned because "they believe that is in the best interest of farmers." 
 	
 The group's decision to extend the offering 60 days will allow new investors to come in and for existing investors to increase their stock purchases. EP

Group Sets Record Equity Drive and Extends Offering Period

Mid-Missouri Energy Names Malta Bend Site

Measuring the success of the ethanol industry has become fundamental for the United States Department of Agriculture (USDA). With the first industry benchmarking survey completed nearly 12 years ago, and a second in 1999, we are now embarking on the third. BBI International has been retained by the USDA to conduct the 2003 industry-benchmarking program on their behalf. The production data is collected through a series of private interviews with as many ethanol plants as possible. We hope to have the preliminary results of this survey completed in time for the USDA to share them with everyone at this year's International Fuel Ethanol Workshop & Trade Show (FEW).
 
 The results of the 1999 benchmarking survey showed a marked improvement in all facets of production from 10 years earlier. Energy consumption was down nearly 25 percent, conversions of corn to ethanol a 15 percent gain and in some cases more, water use was down substantially and overall efficiencies were vastly improved. These are the improvements that help maintain strong public policy for ethanol. 
 
 There has been some controversy over the need for benchmarking in the industry, yet there are many - in fact a large majority - who believe that it is an essential exercise as the ethanol industry grows. Almost every major industry benchmarks itself as a means of measuring their progress. While many plants measure their own progress, they have little, if any, means to measure themselves against other similar facilities. Therefore, their measurements are often done in a vacuum. We have established the baseline. Now we need to measure our progress as an industry - not just internally at each facility.
 
 Of course the surveys are strictly confidential; the USDA receives only the non-plant-specific tabulated results. We sign long-term confidentiality agreements with each participating plant and destroy the survey sheets once the tabulations are completed for the USDA. The USDA then reviews the results for authenticity and summarizes them for publication. 
 
 We look forward to embarking on this exciting project and hope that every single plant in production enthusiastically participates in this important exercise. We appreciate the willingness of the USDA to fund this important project and intend to eventually make it a semi-annual procedure.
 
 
 Mike Bryan

 President, BBI International
 mike@bbiethanol.com

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The Way I See It

WASHINGTON, D.C. - The Renewable Fuels Association (RFA) praised the House of Representatives on April 11 for approving a comprehensive energy bill that includes a five billion gallon per year renewable fuels standard (RFS).
 	
 "We applaud the House of Representatives for including a five billion gallon RFS in their energy bill," stated Bob Dinneen, RFA president. "This is a major improvement over the House bill last year. We appreciate the strong leadership of Speaker Dennis Hastert and many others on both sides of the aisle for their hard work to promote ethanol. It is clearly time for this country to make a commitment to domestic, renewable fuels like ethanol and biodiesel. After all, farmers are committed to making this program part of the solution to our energy security and economic development needs."
 	
 Under the bill, the current oxygenate standard for reformulated gasoline would be removed, air quality anti-backsliding provisions would be enhanced, and an RFS reaching five billion gallons in 2015 would be established.
 	
 "The RFA will continue to work with both the House and Senate to secure an RFS schedule that reflects the recent growth in ethanol production capacity. We commend the progress that has been made and look forward to working with the overwhelming, bipartisan coalition supporting a robust RFS as the process moves forward," the RFA leader said.
 
 The bill will now go to a joint House-Senate conference committee once the Senate passes its energy bill. The conference committee will produce a uniform bill to be sent back to the House and the Senate for final passage.
 
 Corn Growers Speak Out on Behalf of RFS
 In other RFS-related news, thousands of corn growers from all over the nation have told Congress they want an RFS. National Corn Growers Association (NCGA) members last month continued to show their grassroots support of an RFS by logging on to the Legislative Action Center (LAC) at the NCGA's web site, www.ncga.com.
 	
 NCGA President Fred Yoder praised the members, who in the last 90 days have sent 2,016 e-mails from the LAC to members of Congress, voicing their support for the RFS. 

 	
 "The RFS legislation is moving as fast as it has, in my opinion, as a result of the grassroots effort shown by our growers," said the Plain City, Ohio, corn grower. "There's no way we could have done this without their help." EP

House approval means the 'stage has been set' for the energy bill to go to a joint House-Senate conference committee once the Senate passes its energy bill.

House Passes Bill with Five Billion Gallon per Year RFS

The RFA announces on this day that the House Rules Committee has finalized the "rule" for debate of H.R. 6, the House comprehensive energy bill. "The Rules Committee has not ruled any amendments to Title IX (the fuels provisions). Therefore, unless something unforeseen happens, if the energy bill passes the house, the fuels provisions – including the RFS – will be exactly as they came out of committee," RFA Spokesperson Monte Shaw told EPM, just hours before the vote.

April 10 No Amendments Made to Fuels Section of House Energy Bill

This article highlights our approach to converting biomass into ethanol using agricultural residues or coproducts as the substrate. Pectin-rich residues, such as those from processing of citrus, apples, and sugar beets, contain significant quantities of carbohydrates. These residues are available in relatively large amounts and are stockpiled in processing plants which may decrease transportation and collection costs. Ongoing research is designed to evaluate the feasibility of building a rural-based biorefinery coupled with existing agricultural processes. Our studies using pectin-rich sugar beet pulp as the processing coproduct for fuel ethanol production with engineered bacteria as the biocatalyst will be briefly described as the foundation for a rural-based biorefinery. 
 
 Lignocellulosic Biomass Conversions 
 Corn-to-ethanol plants currently produce most U.S. ethanol and are located predominantly in the Upper Midwest. Environmental concerns, realization that fossil fuel is limited, and increasing discomfort with our dependence on foreign oil may significantly increase the demand for ethanol. Lignocelluose constitutes the bulk of renewable biomass, is available in a wide geographic area, and may be grouped into four major categories: dedicated energy crops, urban wastes, forest related products, and agricultural residues and coproducts. 
 	
 Most lignocellulose is resistant to degradation and presents a challenging process hurdle. Ideally, the cellulose and hemicellulose components would be solubilized and fermented to ethanol, while the high BTU value lignin could provide energy for ethanol recovery. Lignocellulose is usually subjected to some form of pretreatment (dilute acid hydrolysis, steam or ammonia explosion, for example) in order to render the cellulose components accessible to enzymatic degradation. Many researchers have contributed to making a lignocellulose-based ethanol process that is economically feasible. In addition, companies such as BC International, Iogen/Petro Canada, Arkenol, Masada Resource Group, Bioresearch Engineering, and others are in various stages of lignocellulosic biomass-to-ethanol projects. 
 
 A Biorefinery from Pectin-rich Residues 
 A significant benefit of using agricultural residues for a biorefinery is that several products are generated from an already collected, partially processed biomass stream (Figure 1). According to the Roadmap for Biomass Technologies in the United States (http://www.bioproducts-bioenergy.gov/pdfs/FinalBiomassRoadmap.pdf), a biorefinery is "a processing and conversion facility that (1) efficiently separates its biomass raw material into individual components and (2) converts these components into marketplace products, including biofuels, biopower, and conventional and new bioproducts. As we all realize, ethanol must be made cheaply in order to compete with gasoline. Unfortunately, the cost of a gallon of gasoline ignores the true cost of using petroleum-based fuels including: environmental damage, military actions, imbalance of trade, etc. If additional higher-value products could be manufactured from a single biomass stream - or fractionated stream - the overall costs of ethanol production should decrease. As corn-to-ethanol producers already realize, a surplus of coproducts produces new opportunities as well as challenges, and can greatly alter the overall economics of their process. 
 	
 Our recent studies have used pectin-rich sugar beet pulp as a substrate for production of fuel ethanol. Sugar beet pulp is produced annually on the order of 400 million tons, with U.S. production fluctuating between 20-30 million wet tons for the past 20 years. Production of livestock feed from beet pulp can be an economically marginal part of beet sugar processing because of low feed value and relatively high drying costs, with 20 percent to 40 percent of overall energy costs of sugar beet processing devoted to dehydration and pelletizing pulp. The market for ethanol production from whole sugar beets may be self-limiting due to competing value as food, similar to corn-based fermentations. However, conversion of parts remaining after processing is an attractive option for production of fuel ethanol and for environmental bioremediation. Another attraction of this approach is that a significant number of agricultural processing plants, such as sugar production from beets, are farmer/industry cooperatives. Farmers and rural communities would see a much greater benefit if they are able to produce the biofuels or bioproducts themselves, either on the farm or as owners in a local production plant.
 
 Recombinant Bacteria as Biocatalysts

 Our laboratory at the University of Georgia is evaluating microorganisms isolated from the environment and engineered bacteria capable of fermenting acidic sugars for the production of ethanol and specialty chemicals from pectin-rich biomass (Figure 2). Environmental isolates from diverse sites ranging from agricultural processing sites to the gut of a lignocellulose digesting aquatic insect are being explored for novel organisms and enzymes for biomass conversions. Related projects involve using chemical pretreatments to help decrease the amount of enzymes required for biomass degradation. Another aspect of our research collaborations is to identify specialty chemicals coproduced with ethanol, and those that may be produced from a separate processing stream at the same plant.
 	
 One recent project used sugar beet pulp for fermentation to ethanol by engineered bacteria provided by Dr. Lonnie Ingram at the University of Florida. These engineered bacteria contain the ethanol pathway genes from another bacterium, Zymomonas mobilis. Sugar beet pulp was used as collected at the processing plant in the pelletized (10 percent moisture), pressed (75 percent moisture), and wet (90 percent moisture) forms. All forms performed well in initial studies, with the pressed pulp yields slightly higher than the others. 
 
 Although several of the engineered bacteria possessed enzymes for biomass degradation, low levels of ethanol were 
 produced (3-12 grams/liter, depending upon the bacterium and form of pulp). When fermentations were amended with commercially available fungal enzyme preparations, the ethanol concentrations increased accordingly. Using 122 g dry weight pulp/L present at the start of fermentations and 1 percent v/v of pectinase and 1 percent cellulase, over 40 g ethanol/L was produced after 48 hours of fermentation using a recombinant strain (Figure 3). Using a second approach of starting at a 10% solids concentration followed by pulp addition (122 g dry weight pulp final solids), 38 g ethanol /L was produced by 120 hours with 1 percent v/v cellulase and only 0.5 percent v/v pectinase. These recombinant strains could not metabolize cellobiose, and an additional 0.27% v/v of cellobiase was required to reach 40 g/L ethanol (Figure 3). Currently a cellobiose metabolizing strain is being evaluated in similar studies. An ethanol concentration of 40 g/L was our target for cost effective distillation, however, some believe that lower concentrations of ethanol may be economically recovered with the economics of the overall process allowing flexibility. With no chemical or physical pretreatments and an enzyme loading of 0.57 percent v/v cellulase, 0.28 percent v/v pectinase, and 0.28 percent v/v cellobiase, recombinant E. coli generated about 30 g ethanol/L. 
 	
 We have also evaluated chemical pretreatment of the pulp such as ammonia pressurization and depressurization (APD) in collaboration with Dr. Bruce Dale at Michigan State University, in which the pulp was exploded by sudden evaporation of ammonia in a reactor vessel. ADP substantially increased hydrolysis efficiency of the cellulose component, comparable to other types of biomass. Sugar beet pulp was the first pectin-rich biomass to be ADP processed and initial experiments showed that when hemicellulose and pectin-degrading enzymes were added, treated pulp hydrolysis was no better than untreated controls. Initial studies with dilute acid hydrolysis in our laboratory and others, coupled with the ADP results indicate that chemical pretreatments of pectin-rich residues has yet to be optimized. 
 
 Ongoing Studies 
 In order to further decrease the amount of externally supplied fungal enzymes in beet pulp fermentations, we are engineering bacteria for production of pectin-degrading enzymes. In collaboration with Dr. Ingram, we are evaluating engineered Escherichia coli strains for pectin-rich biomass conversions by adding Erwinia chrysanthemi secretion pathway genes and genes for pectin degradation. Two new recombinant derivatives of E. coli, LY41 and LY40, containing the casAB operon for cellobiose utilization and the pelE gene for pectate lyase activity, show promise for cost efficient pectin-rich biomass conversions for fuel ethanol production.
 	
 Another aspect of our research collaborations is to identify specialty chemicals coproduced with ethanol, and those that may be produced from a separate processing stream at the same plant. Flavor enhancers, antimicrobials, and high quality absorbent cellulose, are just a few of the products that may be produced from a beet-pulp-to-ethanol processing facility. 
 	
 Finally, a collaboration with researchers at the University of Georgia, Oak Ridge National Laboratories and Michigan State University may help to determine the fate of lignocellulosic carbon in small stream ecosystems while providing novel microorganisms and their enzymes for potential industrial applications. EP

University of Georgia researcher Dr. Joy Doran Peterson highlights her team's approach to converting biomass into ethanol using pectin-rich residues, such as those from processing of citrus, apples, and sugar beets.

Pectin-rich Biorefinery for Production of Ethanol and Specialty Chemicals

The modern approach to distillers grains marketing, or "retail feed merchandising," as it's now sometimes called, sets few boundaries on the latent possibilities of research, brand building and niche-market exploration.
 	

 Veteran merchandiser Randy Ives, president of ICM Marketing, understands and appreciates this modern approach as well as anyone in the business. He adheres to an unscripted business philosophy that hinges success upon product quality and places an emphasis on niche market discoveries. In fact, the University of Illinois graduate's belief in the intrinsic value of distillers grains has resorted to word creation: His vernacular now includes the mega-jargon "decommoditize," a word used to describe his belief in building value and brand loyalty through local, niche-market sales. 
 	
 "We have to stop treating distillers grains like a commodity" he frequently says at industry workshops. "We need to get away from just loading rail cars." 
 	
 Not all merchandisers see eye to eye with Ives, and he doesn't pretend they do. But his message is based on experience and his zeal is earnest. 
 	
 Distillers grains with solubles, referred to as DDGS when mechanically dried in gas-fired rotary drum dryers or ring dyers, is also sold wet - straight off the plant - and in various modified forms, including pellets, bags and barrels. It is a surprisingly sophisticated and versatile livestock feed with growing dairy, beef, swine and poultry applications worldwide. Niche and specialty markets are bringing new success to the business and the ICM Marketing team is among the best in the game. 
 
 Niche Marketing
 "Every marketplace, every plant, has a niche. Sometimes it's obvious, sometimes it's not," Ives says. "I believe it is our job to discover those niches whenever possible."
 	
 Ives said ICM Marketing, a sister corporation of Colwich-Kan.-based ICM, Inc., one of the fuel ethanol industry's leading process-engineering firms, has operated relatively low key, with good results, since the company's inception eight years ago. 
 	
 "For the most part, we've been more focused on merchandising than promoting our company," Ives said. "ICM Marketing started with the belief that if we do things right and build success on our reputation, business would just come to us - and it has - but you can expect us to become more visible now. We feel it's time for that."
 	
 In fact, most distillers grains marketing firms operate relatively quietly and receive little media attention in comparison to ethanol production facilities, suppliers and service providers. ICM Marketing is one of several major distillers grains merchandisers based in the Midwest. Other successful firms include Minneaplois-based Commodity Specialists Company (CSC), Scotland, S.D.-based Dakota Commodities (a subsidiary of The Broin Companies), Shoreview, Minn.-based Land O' Lakes Farmland Feed, and U.S. Commodities, of St. Paul. Some of these merchandisers market brand name distillers grains products specific to plants represented by the marketer. Dakota Commodities, for example, sells only "Dakota Gold" disitillers grains from Broin-managed ethanol plants. Many buy and sell from one another based on regional supply and demand. 

 
 A Balancing Act
 Traveling and speaking at ethanol and distillers grains meetings is an aspect of work Ives has always enjoyed and taken quite seriously. Along with representatives from the other major marketing firms, Ives is one of the most frequently requested speakers at distillers grains seminars across the country. 
 	
 "I enjoy meeting people, and I enjoy traveling," he says, adding, "Merchandizing is the love of my life. At the same time, my job is to manage and help represent ICM."
 	
 So being president of ICM Marketing is a rewarding balancing act for Ives: manage, merchandize and promote. It's what he does best, and it's the reason ICM President Dave Vander Griend wanted him on his team when ICM was formed in 1995 after Vander Griend bought out the engineering and marketing divisions of High Plains Corporation (now Abengoa) in Colwich, Kan.
 	
 Ives was the lead marketing manager at High Plains and took a similar position with Vander Griend's newly formed ICM when the company was formed. ICM, Inc. restructured a few years later to attain a moderate level of autonomy among its different divisions. Subsequently, ICM Marketing was formed and Ives was named company president. His marketing team, which started with just Ives and three others, now includes a staff of 13 men and women headquartered in a building that stands independent from ICM's main office but located on the same property. 
 	
 "While we are a separate company located in a separate office structure, we remain very close-knit, and interlinked with the engineering side of the company," he said, adding, "It's always been very important to us to maintain the cohesiveness that ICM began with. This matters to me because our merchandisers are the kind of folks who know their way around an ethanol plant and can comfortably talk to operators and engineers. We understand the process and that means we really understand the product."
 	
 Ives' knowledge of merchandising comes from both academic and practical experience, education and training. He's been a part of the grain industry since the late 1970s when he attended Kansas State and worked as an operator and laborer in a grain terminal in Atchison. He told EPM his experience began in ag processing plants with a "scoop and shovel." College was always part of his master plan, but like so many young adults, he struggled to find a degree that suited him well. 
 	
 "At Kansas State, my (major) was accounting," he says, "but my heart wasn't in it."
 	

 Later, while working in grain facility, he decided to give college another try, this time choosing agricultural economics and attending the University of Illinois, Urbana-Champaign, where he earned a degree in the mid-1980s. He came out of college ready to work and dead set on finding a job as a grain trader. 
 	
 "I was at a job fair after graduation and was talking to a Pillsbury rep," Ives recalls. "This guy needed a feed ingredient merchandiser and was interested in hiring me. I adamantly refused to consider any position outside of grain trading. . . I thought I knew exactly where I wanted to go, but 18 years later, seeing where I am today, I was obviously a little short-sighted, or at least closed-minded, to other career paths."
 	
 Amusingly, that former Pillsbury representative happens to be Eric Jackson, a friend and collogue of Ives who now works for the Scoular Company, a grain and feed ingredient merchandiser located in in Kansas City and St. Paul. 
 	
 Ives eventually took a job with the soy-crushing division of AGP, in Omaha, Neb. (before AGP had an ethanol plant), where he stayed for nine years. It was a rewarding, yet demanding, job. 
 	
 "They paid to move me eight times in nine years," he said. "It wasn't always easy, but I learned a tremendous amount and I'm very appreciative of my time there."
 	
 In 1994, Ives took a new postion with High Plains, where he stayed until leaving with Vander Griend and the original ICM team in 1995. 
 
 Today, Ives and his family (he's married and has two teenage children) live in Wichita, about 10 miles from his Colwich office. 
 He has been instrumental in helping ICM develop a high volume retail merchandising operation with services ranging from grain procurement, feed ingredient sales, logistics, fleet management, quality control to risk management through hedging, market forecasting, inventory management and the carrying of accounts receivable. The company has developed a network of nutritionists in each of the dairy-sheds in Kansas, Iowa, Wisconsin, Missouri, New Mexico, Oklahoma and Texas. According to Ives, this allows ICM Marketing to attain maximum revenue on the value-added products that it merchandises from a variety of suppliers. In addition to distillers grains, but to a lesser extent, the company markets corn gluten pellets, soyhull pellets and beet pulp pellets. It also markets corn, milo, and wheat. 
 	
 Distillers grains remains the company's top product. ICM marketed roughly 475,000 tons of distillers grains (dry equivalent at 10 percent moisture) last year, and that number is likely to increase significantly by the end of 2003. A portion of that total is milo-based (grain sorghum), or milo-mixed distillers, although most is the more common corn-based product. Much of it is marketed wet and, consistent with Ives' belief in local niche markets, sold to end-users near the plant. 
 

 'Decommoditize'
 The further distillers grains is shipped, the more likely it is to be seen as a commodity," Ives told EPM. "There is little differentiation between the distillers of one plant and the distillers of another when it is shipped across the country. At the local level, the end user can lock in on one plant, one product and one certain quality that will stay consistent over time."
 	
 He continued, "For example, if you're selling distillers grains into a local market, you're going establish a relationship of accountability with the end user. The customer knows he can get feed on the day he needs it. He can count on the product, in terms of quality and consistency of supply. And if he can't, you have to deal with running into this guy at the local Krispy Kreme. He knows your name, you know his. . . that's accountability."
 	
 The further away from home merchandisers ship distillers grains, Ives said, the less important buyer-seller relationships become. "The product is no longer seen as a locally-produced feed with distinct characteristics, but just another load of DDGS. The brand identity gets lost along the way," he says. 
 	
 With ethanol production expected to rise exponentially in the next ten years, Ives believes it is more important now than ever before for ethanol producers to utilize local markets (including dairy, beef, poultry and swine) before shipping product to less obvious specialty markets outside the Midwest. He advocates this as a responsible approach to growing markets for distillers grains from the Midwest out. 
 	
 "Some of the Northern plants are penetrating West Coast markets pretty hard, and that's positive on the surface, but it also leaves the local markets (underdeveloped) to an extent. Is that healthy for the industry? I'm not sure," he says. "Nebraska producers have significant freight advantage over plants in Minnesota and South Dakota, but they're still selling distillers grains locally because the demand is there. But if push comes to shove, those Nebraska plants could start looking West. What happens then?"
 	
 These are the kind of thoughts that often enter into Ives' presentations when he speaks at workshops and meetings. He speaks about the importance of each plant "doing its part" to saturate the local markets before selling their product short. At the same time, he recognizes that ethanol producers in Minnesota have done a tremendous job advancing research and development for using distillers grains as a poultry and swine feed. "That's the sort of niche I'm taking about," he said. "It's terrific and admirable work that is probably going to benefit the whole industry."
 
 Believing in the Product
 Ives believes in distillers grains, and he let's people know it. 

 	
 "It's a wonderful feed, especially for ruminants and monogastrics. He says, 'It's an exciting industry to be a part of. Today, we are building markets for tomorrow. That's the way I look at it. Developing new markets for distillers is good for the industry, its good for the end user, and it's good rural development. What's not to like."
 	
 Sure, but there's always room for improvement. So what does Ives think the industry could do better? 
 	
 "Quality, quality, quality," he says without hesitation. "Consistent quality is the most important thing we can do to grow this industry," he said. "When problems arise with distillers grains, it's usually a matter of a poor batch that could have been isolated or sent somewhere where it could have been used appropriately. Every plant has normal upsets - and everyone knows that a mistake up front will affect the end product. We all need to take ownership in distillers grains. It represents just 25 percent of a plant's revenue, but it's an important 25 percent."
 
 Ives takes a windfall approach to dealing with the growing amount of distillers grains entering the U.S. market. 
 	
 "The market is, and will continue to be, ethanol driven," he said, "and the upside for increased ethanol demand is more distillers grains production. The industry is not unlimited - no market is - but we're truly just starting to penetrate these new markets and distillers grains will become broader-ranged and reach more animal types in the coming years. It will become more consistent in both its quality and supply. We're not a month-by-month industry anymore. The product is consistently available whenever the end user needs it." 
 	
 He also advocates and foresees the development of alternative products streaming off of distillers grains. 
 	
 "If you look at where we find value in our products today, it's almost entirely ethanol, distillers grains, and sometimes carbon dioxide," he says. "But research and development is leading us toward more diversified products from distillers grains. We're starting to see what can be achieved by separating out the nutrients for nutraceutical and pharmaceutical production. So, in contrast to what many people are saying about the industry getting even more standardized, and more homogenous, I think you might see more diversification in the form of new high-tech, value-added products in areas that we have not previously pursued." EP

Randy Ives has led ICM's young marketing company to success, established himself as one of the top feed ingredient merchandisers
in the nation, and found his life's work doing it.

Finding a Niche of His Own

The Marathon Ashland Petroleum refinery in St. Paul Park, Minn., began blending E85 early this month. As part of a new strategy, the refinery will aid small retail fuel chains and independent filling stations by handling paperwork needed for federal tax credits for the alternative fuel. Proponents hope to boost awareness and use of the fuel so that eventually it will be used by millions of drivers in Minnesota and the United States. Minnesota leads the nation with more than 70 retail stations selling E85 and government fleets using it.

April 4 Marathon Ashland Refinery Blends E85

The N.D. House and Senate passed legislation that would provide continuing subsidies to North Dakota's two existing ethanol plants and incentives to new plants to be built in the state. After debate, the state legislators passed the House bill 78-14, followed by a 46-0 Senate vote. The total two-year package includes $3 million - $1.8 in ethanol subsidies and $1.2 in construction incentives. The legislation, which started out from Gov. John Hoeven's budget proposal of $3.8 million in incentives for new ethanol plants only, went through several versions to the bill passed this month. Under the latest version, Alchem, which annually produces 11-mmgy in Grafton, would be eligible for $600,000 of state subsidy per year, and the ADM plant in Walhalla, producing 30-mmgy, would be eligible for $300,000 of subsidy. New plants built after July 31 this year will be given incentives based on the market corn prices and gas prices, but significantly less than what the governor had set aside for them. Gov. Hoven, chair of the Governors' Ethanol Coalition, signed the bill into law April 14.

April 2 North Dakota Legislators Agree to Incentives

State plans to possibly eliminate the producer's credit for ethanol hasn't throttled enthusiasm for new ethanol development in the region. Organizers for Granite Falls Community Ethanol, LLC said they are finding the interest they hoped for as they attempt to raise equity for the proposed $55 million dry mill. One month into its initial equity drive, the group has already raised 20 percent of the investment sought, said Paul Enstad, chairman of the company's board of directors. Enstad said he is optimistic that the drive will succeed in raising the equity needed to make the project go forward. The equity drive will continue into June. The group is proposing to build a plant capable of producing over 40-mmgy.

March 28 Granite Falls Projest Takes Shape

Reportedly following the moves of other international ethanol industry service providers, Dedini Industries de Base, of Brazil, is aggressively going after the nation's lucrative anhydrous ethanol market. The Brazilian engineering major, one of the world's largest builders of alcohol distillation plants, has tied-up with Brazil-based Uttam Group to offer domestic sugar mills "flexible technologies and complete turnkey solutions" for ethanol production. Brazil is today the world's biggest producer of fuel ethanol, with its annual output of 12.3 billion liters (3.25 billion gallons a year), exceeding even that of the U.S. It has been reported that over 85 percent of Brazil's ethanol production is based on Dedini's technology.

March 27 Brazil Ethanol Tech Companies Unite

As reported on page 10 of this publication, the Renewable Fuels Association (RFA) on this day hails the House of Representatives for approving a comprehensive energy bill that includes a 5 billion gallon per year renewable fuels standard (RFS).

April 11 House Passes Bill with RFS Provision

The RFA on this day announces that the Bush Administration released its "Statement of Administration Policy" (SAP) regarding H.R. 6, the Energy Policy Act of 2003. The announcement came just before the House passed the bill. In the SAP, the Bush Administration reiterates its support for including a RFS in the energy bill, stating: "The Administration also supports increasing the use of clean, domestically-produced, renewable fuels such as ethanol and looks forward to working with Congress to ensure that a renewable fuels standard is included in final energy legislation."

April 11 Bush Administration Reiterates Support for RFS

The RFA on this day circulates a two-page summary of a California Energy Commission (CEC) report that tells the truth about high gas prices in the state. RFA President Bob Dinneen said: "The CEC report completely exonerates ethanol from any role in California's recent high gasoline prices.  The CEC conducted a thorough, fact-based review that sheds light on the real forces at work in California.  This is a welcome change from recent speculation by some energy pundits that upon closer inspection proved to be unfounded.  The facts are clear:  wholesale prices began their spike well before the summer blending season and have actually declined precipitously since refineries switched to producing summer CARBOB."

April 4 RFA Sends CEC Report to Industry

On this date, the RFA, along with a historic coalition of highway and agriculture groups, announce that they have sent a letter to Senate Finance Committee Chairman Chuck Grassley, R-Iowa, and Ranking Member Max Baucus, D-Mont., praising their proposal – to be introduced with Sens. Tom Daschle, D-S.D., and Jim Jeffords, I-V.T. – to reshape the ethanol excise tax exemption so that ethanol-blended fuels make the same contribution to the highway trust fund (HTF) as regular gasoline. EP

April 1 Historic Highway and Ethanol Coalition Unites to Support Improvements to Ethanol Excise Tax

Here in Washington we produce paper. So it should come as no surprise there is an overabundance of press releases with bold headlines, snappy sound bites, and overblown rhetoric.
 	
 Amidst all this clutter, sometimes a truly historic announcement can be lost.
 	

 A few weeks ago just such an announcement was made. A tri-partisan group of Senators, including Sens. Chuck Grassley, R-Iowa, Max Baucus, D-Mont., Jim Jeffords, I-Ver., and Tom Daschle, D-S.D., introduced legislation that would completely revamp the ethanol excise tax exemption.
 	
 Under the new proposal, the tax incentive gasoline marketers receive when they blend ethanol would no longer be funded out of the Highway Trust Fund (HTF). Instead it would be funded by general revenues - just like incentives for oil, gas, solar, hydrogen, and literally every other form of energy this country uses.
 	
 Further, the new ethanol excise tax incentive will not be tied to specific blend levels, but rather be applied on the total volume of ethanol blended. Therefore, problems with the current income tax credit and the alternative minimum tax (AMT) will be eliminated. This is great news for E85 and E-diesel.
 	
 Since the ethanol incentive was first enacted in 1979, it's gone through several modifications. However, one constant has been its impact on the HTF. Because expanded ethanol use equaled reduced HTF revenues, a broad array of highway groups have continuously fought to eliminate the incentive or to defeat proposals, like a renewable fuels standard, that would increase the use of ethanol.
 	
 The highway groups were not necessarily anti-ethanol. They simply wanted to increase funding to build and repair our nation's roads and bridges. Make no mistake; building roads and bridges is among the top priorities of nearly every Member of Congress. The highway lobby is considered one of the most powerful on Capitol Hill.
 	
 But the new ethanol tax credit ends the acrimony. After 20-plus years of being on opposing sides, an historic group of highway, ethanol and agriculture groups have united behind this proposal. In a letter to the bill's authors the group wrote: "Two important national priorities would be achieved: ensuring all users of the nation's highway network contribute equally to its improvement; and decreasing U.S. dependence on imported fuel."
 	
 Everyone wins. The highway industry will see HTF revenues grow by more than $2 billion annually. The oil industry will enjoy greater flexibility - opening new opportunities for ethanol. The auto industry will benefit as more E85 is used in their flexible-fuel cars, building support for that program. Consumers will benefit from a diversified fuel supply and reduced dependence on imported oil.
 	
 Even the government will benefit. Implementation simplification is expected to save the IRS more than $400 million over ten years.
 	
 Building coalitions, especially truly historic coalitions, is how progress is made in Washington. The Renewable Fuels Association is proud to have once again put comity over conflict. A sound energy policy and a sound highway policy need not be mutually exclusive.

 	
 We commend the tri-partisan leadership on this effort and believe strongly that their common sense approach to promoting two national priorities will garner overwhelming support on the way to becoming law.
 
 
 Bob Dinneen
 President and CEO,
 Renewable Fuels Association

April 2003

Columns

The Way I See It

A View from the Hill

Featured

Ethanol Plant Construction in America How Long will the Boom Last?

Advent of the Giant Dry Mills

Fledgling Australian Industry Battles Misinformation

Pectin-rich Biorefinery for Production of Ethanol and Specialty Chemicals

Finding a Niche of His Own

April 2003.css-7jxktu{position:absolute;bottom:0px;left:0px;right:0px;height:3px;border-radius:3px;background-color:var(--chakra-colors-brandBlack);}

Columns

The Way I See It

A View from the Hill

Featured

Ethanol Plant Construction in America How Long will the Boom Last?

Advent of the Giant Dry Mills

Fledgling Australian Industry Battles Misinformation

Pectin-rich Biorefinery for Production of Ethanol and Specialty Chemicals

Finding a Niche of His Own

April 2003