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Ethanol Boom Aids Farmers, but Stirs Environmental Concerns

October 9, 2007 at 6:15 PM EST
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TOM BEARDEN, NewsHour Correspondent: For Ruben Richardson, this year’s corn crop is golden.

RUBEN RICHARDSON, Farmer: Corn at one time was two dollars more a bushel than it was a year ago. You know, that’s 100 percent increase. So, therefore, we’re planting a lot more corn acres. I’ve changed probably 20 percent, 25 percent of my farm over to corn.

TOM BEARDEN: Richardson is a third-generation farmer in Yuma County in eastern Colorado. He says high prices and excellent yields have made this a great time to be a farmer.

RUBEN RICHARDSON: It’s an achievement that my dad would have — he’s passed now — but this is what he would have lived for, something like this. This is — you know, farmers have kind of been known as the extreme optimists. “There’s always next year.” You get hailed out, wiped out two or three years in a row, and there’s always next year. It’s just what keeps us going.

TOM BEARDEN: And next year finally came.

RUBEN RICHARDSON: Next year, it appears to be here.

TOM BEARDEN: Corn prices have shot up as the country turns to ethanol to stretch gasoline to counter soaring prices. Feed corn, like the kind Richardson grows, is the main ingredient used to produce ethanol. And Richardson is betting that both oil and corn prices will stay high by investing in a new ethanol processing plant near his field.

He’s not alone: Ethanol plants are springing up all over the rural Midwest, many backed by local farmers. The Yuma plant went online in early September. Dave Kramer is the president and general manager.

DAVE KRAMER, Yuma Ethanol LLC: Eighty-five percent of the investment came right in this local community in northwestern Nebraska and eastern Colorado. The majority of them are large corn farmers; that will bring their corn product to the plant.

A "long way to go"

Andrea Anderson
Yuma County Economic Development
We've got young people coming back into our communities. So we're bucking the trend of the dying rural communities, and that's what we're seeing, is just a renewed energy and a renewed optimism.

TOM BEARDEN: President Bush has urged the country to replace 20 percent of its gasoline with renewable fuels like ethanol. The goal is backed by a 51-cents-a-gallon tax credit to ethanol blenders and a 54-cents-a-gallon tariff on imported ethanol.

DAVE KRAMER: We're only at about 2 percent or 3 percent of the U.S. gas supply right now with ethanol, so I think we have a long way to go to make an impact.

TOM BEARDEN: Nationwide, 119 ethanol plants are in operation; 86 more are in the works. The USDA predicts ethanol production will double by 2009. In fact, so many new ethanol plants started up this summer that the price of ethanol plunged 30 percent, but most see it as a short-term glut likely to even out as the ethanol market expands.

Most of today's gasoline blends are only about 10 percent ethanol, but a small number of filling stations are now offering E85, or 85 percent ethanol.

In Yuma, where the economy and culture have always been based on farming and ranching, the ethanol boom has been welcome. Many farming communities of this size -- Yuma has about 3,400 residents -- have slowly been declining over the last several decades. Andrea Anderson, from the Yuma County Economic Development Corporation, says the new ethanol plant ensures a bright future.

ANDREA ANDERSON, Yuma County Economic Development: We've got a new hospital here in town. They built a school a year ago, you know, all looking for this growth, knowing that we were going to have this growth. So we've got increased land prices. We've got increased home values, and we've got entrepreneurs moving back, young people. And that's the most important thing, is that we've got young people coming back into our communities. So we're bucking the trend of the dying rural communities, and that's what we're seeing, is just a renewed energy and a renewed optimism.

Flaws of ethanol fuel

Jan Krieder
University of Colorado
If we grew enough corn to fill half our gas tanks, we would use all the good farmland in the country. We would use 10 Colorado Rivers full of water, more oil than we would need if we didn't ever touch ethanol, because ethanol can't be piped.

TOM BEARDEN: But not everyone is as optimistic about ethanol's long-term future. University of Colorado Professor Jan Krieder co-authored a study that examined the cornfield-to-gas-tank costs of producing corn ethanol. He says it's a deeply flawed alternative fuel.

JAN KRIEDER, University of Colorado: We found out that ethanol has some problems. Particularly, it uses a tremendous amount of water. This is averaged over the whole country. A tremendous amount of irrigation is required, a lot of land.

In other words, if we grew enough corn to fill half our gas tanks, we would use all the good farmland in the country. We would use 10 Colorado Rivers full of water, more oil than we would need if we didn't ever touch ethanol, because ethanol can't be piped. It needs to be hauled, oh, in railway cars, in trucks, that kind of thing. So it's a problem on many levels to match gasoline, let alone beat it.

TOM BEARDEN: Is there an environmental benefit to burning ethanol?

JAN KRIEDER: You know, there's not. If we grow ethanol, grow corn, make ethanol, burn it in cars, we produce more CO-2 than if we just used gasoline. And, again, that comes back to the fact that we have to haul that ethanol out of the refineries with trucks. We can't pipe it like we do gasoline; that's the problem.

TOM BEARDEN: Others are concerned that growing feed corn to make ethanol takes that corn out of the livestock food supply, thus raising the price of beef and dairy products. But Dave Kramer says the Yuma plant creates a by-product that is a better feed for cattle than regular corn.

This yellowish mash is called distilled grain. It's what's left over after the sugars are stripped from corn kernels to make ethanol.

DAVE KRAMER: The distiller's product is 30 percent protein and 12 percent fat. So it's a three times better product coming out than going in. I've never been involved in an industry like this in the past where the product you use, the co-product that comes out is better than the product it uses.

Efficiency of the system

Dave Kramer
Yuma Ethanol LLC
Since we've got an abundance of corn here in Yuma County, a supply of cattle, and we're only two hours away from the metropolitan area of Denver where a lot of our ethanol will be trucked by transportation to the end user right here in Colorado.

TOM BEARDEN: Yuma's distilled grain is trucked just four miles and sold to Shramm Feedlot, where Thomas Holtorf is the assistant feed lot manager.

How does it work out, cost-wise?

THOMAS HOLTORF, Shramm Feedlot: Right now, it's about 90 percent the cost of corn.

TOM BEARDEN: Is that worthwhile to do this?

THOMAS HOLTORF: It is, because with more ethanol plants, the corn gets tighter, so we have to find the feed source somewhere.

TOM BEARDEN: Dave Kramer says ethanol plants can be most efficient if they're built in the right spot.

DAVE KRAMER: We've got the best of both worlds. Since we've got an abundance of corn here in Yuma County, a supply of cattle, and we're only two hours away from the metropolitan area of Denver where a lot of our ethanol will be trucked by transportation to the end user right here in Colorado.

TOM BEARDEN: The plant also produces 40 percent of the electricity it uses through excess steam and reuses 110 percent of the water it takes in.

But Kramer agrees that the country doesn't have enough land or water to completely replace gasoline. That's one reason scientists at the National Renewable Energy Laboratory in Golden, Colorado, are working on a different kind of ethanol called cellulosic ethanol.

Andy Aden is a research engineer. He's trying to develop the means to make ethanol, which is fermented in much the same way as beer, out of other things than just corn.

ANDY ADEN, National Renewable Energy Laboratory: We've been making wine and beer and making alcohol in lots of forms for thousands of years. And we've known how to do that. Now we're really trying to make it out of any plant material that's available and make it in a cost-effective fashion.

Use of cellulosic fuel

Any Aden
National Renewable Energy Laboratory
The nice thing about this is it takes much less water to grow this material. It's very drought-tolerant. So that presents some added benefits as opposed to say, like, a corn grain. Also, you can get a lot more tonnage per acre of land.

TOM BEARDEN: Aden says several different waste products can fill the bill.

ANDY ADEN: There's a lot more cellulosic feed stocks out there. The corn stocks, the corn husks, wheat straw, hardwoods, you name it.

The ultimate goal is to go to a crop like this. This is called switchgrass. This is a prairie grass that can be found in the United States with a wide geographic range, anywhere from all the way even to North Dakota down to Alabama, I've seen it grown.

The nice thing about this is it takes much less water to grow this material. It's very drought-tolerant. So that presents some added benefits as opposed to say, like, a corn grain. Also, you can get a lot more tonnage per acre of land.

TOM BEARDEN: NREL thinks the future is to build new cellulosic ethanol plants near their raw materials -- corn stalks in the Midwest, switchgrass in the West, woodchips in the South -- but it's much more difficult and costly to break down cellulosic materials than corn.

ANDY ADEN: So it's breaking the material down, it's adding enzymes to further break it down, and then taking all those sugars, fermenting them into ethanol.

TOM BEARDEN: NREL is working with industry to make that process cheaper. At the moment, there are no commercial cellulosic plants in the U.S., but the Department of Energy has awarded six companies $385 million in start-up grants.

And Yuma hopes to be part of that effort in the future: They're already exploring cellulosic technologies for their own ethanol plant.

JIM LEHRER: You can learn more about ethanol, including how your car stacks up against alternative fuel vehicles, on our Web site at PBS.org.