Ethanol, Economics and the Environment

Just two years ago, President Bush signed legislation setting a national ethanol production standard.  The goal was 7 billion gallons a year by 2012.

Experts say the once lofty goal will easily be surpassed next year.  They say it's a sign of how far America has come in the push for renewable fuels.

"We want to lessen our dependence on foreign oil and ethanol is one method we can do that," said Patrick Kirchhoffer, a farm bureau manager.  "It's better for the environment. It gives us cleaner air to breathe, cleaner water, and it's a boost to the local economy, especially here in the midwest."

Corn-based ethanol plants are popping up all over the country.   The renewable fuels association lists more than 100 plants and dozens more under construction.   A majority are in the midwest, where corn is king. 

Kirchhoffer says farmers are seeing corn price spikes like they haven't seen in years, and that it's a direct result of increasing ethanol production.

"It's definitely a boom to the farm economy.  Our demand has increased.  We're using two billion bushels of corn this year to produce ethanol. T hat wasn't there three or four years ago.  It's definitely helped the prices for corn."

Growth in ethanol production benefits more than just the family farm.  Supporters says more than 160 thousand new jobs were created by ethanol last year.  Backers say there's also a positive impact on the environment.  According to the Environmental Protection Agency, ethanol blends can reduce carbon dioxide emisions by 10 to 30 percent.  

Many argue it takes more energy to make it than regular fuel, and therefore is not more environmentally.

"I think we all need to step back and take a look at what alternative fuels are and if the alternative fuels involve coal, natural gas and crude oil, it's not a win," said Terry Beachler, a gas station owner.

The hurdle that remains on the business side is getting more people to use ethanol.  The major automakers are building more flex-fuel vehicles able to use E-85, a  blend of 85 percent ethanol and 15 percent gas, but not many gas stations carry it.