Renewable Energy:
Ethanol Comes of Age

Five years ago, shortly after the Sept. 11 attacks, Indy race car driver Paul Dana had an idea: run the Indianapolis 500, the world’s largest single-day sporting event, on ethanol as a symbol of America’s determination to reduce its dependence on imported oil.

The idea came naturally to Paul, who had grown up on a Missouri farm with a Corn Belt perspective on ethanol. So he set out to make it happen, with the help of the Renewable Fuels Assoc. and some farm groups. He lobbied drivers, team owners and anyone else who would listen, and he soon persuaded Tony George, the owner of the Indianapolis Motor Speedway, to take a close look.

Paul’s perseverance paid off. Once the engineers had vetted the project, Tony George gave the order and the Indy Racing League (IRL) announced a historic switch: Indy cars are going green. The 2006 race was run without incident on a 10 percent ethanol blend, and the 2007 IRL circuit will be 100 percent ethanol powered.

Paul Dana was tragically killed in a racing accident in March 2006 at the Homestead-Miami Speedway in Florida, but his vision lives on. The Farm-Belt “homebrew” of the 1960s is now powering high-performance race cars, as well as helping fuel millions of private automobiles across the country. Ethanol has truly come of age.

This issue of Rural Cooperatives reviews ethanol’s rapidly growing impact on America’s farm economy. When Paul Dana began his quest, the United States was producing 1.77 billion gallons of ethanol annually. In 2005, barely five years later, we produced 3.9 billion gallons. When the 42 plants now under construction join the 102 already operating, total capacity will exceed 7.8 billion gallons. Ethanol this year may absorb 20 percent of the U.S. corn harvest. The effects are many: These and other adjustments will continue to unfold as the ethanol industry matures. From a rural development standpoint, it is important to note that ethanol is much more than just BTUs. It is a rural, distributed resource. Farmers own the feedstock. Transportation costs favor local sourcing and a decentralized production base. State-of-the-art technical and managerial assistance is readily available. A franchise model of development opens the door to local ownership and control.

While the ethanol boom is attracting an ever-wider pool of investors, agricultural producers and cooperatives are thus still able to compete. This is also true in other emerging energy resources like wind, solar and — a few years down the road — cellulosic ethanol. Renewable energy is distributed energy, and that spells opportunity for rural entrepreneurs.

A strategic goal for USDA Rural Development, therefore, is to encourage local investment in, and ownership of, the renewable energy resources already present in rural communities. This is a historic opportunity for wealth creation in rural communities. Renewable energy is a top priority for America’s farmers as well as the nation as a whole, and we look forward to working with America’s cooperatives to get the job done.

Another great opportunity: some of you may still have time to register for Advancing Renewable Energy: An American Rural Renaissance, a conference to be held Oct. 10–12 at America’s Center in St. Louis. See pages 35 & 42 for more details, or visit:
—Thomas Dorr

USDA Under Secretary for Rural Development

September/October Table of Contents