COMMENTARY
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:
- Improved national security due to a reduction in oil
imports.
- A cleaner environment.
- Higher prices for corn growers.
- Wealth creation, new jobs and tax-base increases in rural
communities.
- Potentially higher costs for livestock operations, which
are at least partially offset by an increased supply of
dried distillers grain.
- Lower support payments and reduced U.S. vulnerability
to WTO litigation.
- New markets for third-world producers if ethanol
diverts U.S. corn from the export market and as ethanol
production expands internationally.
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: www.technologyforums.com/6EN/
—Thomas Dorr
USDA Under Secretary for Rural Development
