The Grand Vision Realized

by Gary Truitt (Hoosier Ag Today) ... In 2006 Indiana was in the midst of a revolution, a revolution that would change the fabric of the Hoosier farm economy forever. Ethanol plants were popping up around the state like marestail. In 2005 Indiana had one operating plant, but by mid-2006 there were 21 plants under construction. With investment-friendly policies from state government, billions of dollars of investment poured into rural Indiana over the next few years. Purdue economist Dr. Chris Hurt predicted in 2006 that corn acreage in Indiana and across the country, which had been stagnant for several years, would now begin to increase. Hurt estimated that between 8 and 10 million more acres of corn would be needed nationally and that $4 corn and $7 soybeans would be likely for the next several years.

Dr. Hurt predicted in 2006 that, “Without a federal subsidy, the ethanol industry would not be profitable if oil prices drop below $60 a barrel.” Oil closed last Friday at below $45 a barrel. Ethanol production in the last government report totaled 961,000 barrels per day, the highest since May.

In 2006, Purdue researcher Dr. Mike Ladisch predicted that cellulosic or phase 2 ethanol production would be on-line within 5 years. It has taken a bit longer, but today cellulosic ethanol plants are producing ethanol from a variety of waste and plant materials. Yet — the grand vision is in danger of collapse.

The Obama administration and its pit-bull EPA are stifling the growth of 2^nd generation ethanol in the US. Investment in new plants and technology and continued growth in domestic demand for ethanol has been shut down by the policies of the EPA and its administration of the Renewable Fuels Standard. New cellulosic ethanol plants are being built in France and Brazil rather than in the US. An increasing amount of ethanol produced in the US is being exported because the EPA has limited blending levels here at home.

We are optimistic about the future of agriculture, but wish our leaders in Washington also believed in making agriculture a success by implementing policies that fostered growth, innovation, and productivity. They need to see the grand vision of how a growing and thriving renewable fuels industry can benefit our environment, our economy, and our nation’s energy future. READ MORE