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February 11, 2007

Refueled

Life on the Ethanol-Guzzling Prairie


Peter Newcomb for The New York Times
CORNFED Tiny Laddonia has one of Missouri’s four ethanol plants. The people’s slogan: “Our Crop. Our Fuel. Our Country.”



Peter Newcomb for The New York Times
Not Just Big Agribusiness Ethanol plants like this one in Laddonia, Mo., are popping up all around the Farm Belt.


By TIMOTHY EGAN

BURLEY, Idaho

THE quilt of winter brown that covers the high plateau makes this area look particularly depressing on a February afternoon. But the still-life can be deceptive.

Later this year, a Canadian company, Iogen, will announce whether Idaho will get what could be the first large-scale commercial plant in the United States to produce fuel from straw. Not ethanol made from corn, as refineries in more than a hundred mostly small towns are now doing, but ethanol made from the native prairie grass, corn stalks, field waste and wood chips.

That would follow an announcement just last month that a company whose investors include Bill Gates plans to open a corn-based ethanol plant here in Burley — the latest in a boom of biorefineries that are being planted in some of the most depressed areas of the United States.

What is happening here is a vision that many in rural America see as their salvation: high-performance moonshine from amber fields of grain, and a “grass station” in every town. It may be a chimera. It may drain precious water from the arid plains and produce less energy that it uses.

But it has the undeniable power of an idea in ascendancy.

In part this is because the ethanol economy, as it grows before our eyes, is looking less like a taxpayer-financed Big Plan dominated by a single agribusiness corporation and more like something that might bring fresh jobs and local control back to farm country.

The vision of a decentralized ethanol industry is taking shape, albeit an industry aided by tax breaks and government mandates. There are now 113 American ethanol plants and an additional 77 under construction, according to the Renewable Fuels Association, the industry trade group. Most of them are right in the middle of the Farm Belt, in counties that have been losing people since the Depression.

Archer Daniels Midland, once the dominant force, is less of a player, controlling about 22 percent of the market. But roughly 40 percent of the new biorefineries are locally owned, representing the sweat and capital of farmers, retired schoolteachers and small-town bankers.

With the kind of Wall Street and venture capital money now sniffing around the farm, this could change in the blink of a pig’s eye. But for now, in barren counties with shuttered stores on Main Street, people see a renaissance. They see a biorefinery every 50 miles or so, turning out American fuel for American drivers from American crops. And, once the technology moves from corn to cellulose (as field waste is called), they see the essential stuffing of the scarecrow from the Wizard of Oz providing a sustainable economy that also offers some answers for global warming.

“We’re going to revitalize rural America,” said Read Smith, a farmer in eastern Washington and national co-chairman of a nonprofit group working with some of the biggest names in politics and philanthropy to have agriculture produce 25 percent of the nation’s energy needs by the year 2025. “We’re going to pull the plywood off the windows. We’re going to create a $700 billion per year industry that is not here today.”

Already, in places that have not felt a new pulse in decades, the reality is getting ahead of the dream. From Benson, Minn., where a farmer-owned refinery is making ethanol — and a premium vodka — while returning more than $60 million to local corn growers, to Shelby, N.Y., where a planned biorefinery would provide some of the first new jobs in years, rural America is in a swoon for ethanol.

This year, the nation is expected to produce six billion gallons of ethanol, mostly from corn. That is still barely enough to replace 4 percent of the nation’s gasoline consumption, but is well ahead of the pace dictated by the Energy Policy Act of 2005.

Several thousand people turned out last summer in tiny Laddonia, Mo., for the opening of the state’s fourth ethanol plant. A yard sign, fusing a picture of corn, a gas pump and the flag, carried the slogan that people are marching to: “Our Crop. Our Fuel. Our Country.”

With his call for a mandatory fivefold increase in renewable fuels within 10 years, President Bush in his State of the Union address added his voice to the cause. He was joined by Senator Tom Harkin, Democrat of Iowa and chairman of the Senate Agriculture Committee, who said he wanted to use the coming farm bill to energize rural America.

“We need to think big and act aggressively,” Mr. Harkin said. “My goal is to pass a bold new farm bill that will drive the transition toward enhanced energy security for the nation based on renewable energy from our farms and rural communities.”

The stampede to the cornfields and beyond is not without plenty of risk. You need look only as far as “synfuels,” the disco-era dream to produce fuel from rock beneath the crust of the Rocky Mountains. That effort left open wounds in the mountains, and little to show for it. Or further back, there was the Dust Bowl, a result of a government call to rip up the native prairie grass and replace it with wheat. When grain prices crashed, the land peeled away and covered the flatlands in haze.

And even in small towns with a biorefinery that has been operating for some time, the new jobs and new money have not been enough to keep people from leaving. The Chippewa Valley Ethanol Company in Benson produces 45 million gallons of ethanol a year, which has led to an economic revival in a town with a little more than 3,000 people.

The plant has been in operation for 10 years. But young people are still walking away from Benson. The town and its surrounding county lost 5 percent of its population between 2000 and 2005, according to census estimates.

“But think of what the population drain would have been if Chippewa Valley had not been there,” said Matt Hartwig, a spokesman for the Renewable Fuels Association.

Indeed, the plant’s general manager, Bill Lee, said the fact that there is something new and exciting in an often fragile farm town is a very big deal. “In the 10 years that we’ve been here, there’s been a housing boom, a downtown makeover and the community has authorized a new swimming pool,” he said.

Ten years ago, ethanol was a curiosity, dominated by one company. High oil prices, tax breaks and government mandates have finally created a real industry, diverse and growing.

Though some big money is moving into corn and the leap to fuel from straw, the small producers can compete on price because they are so close to the product, at its creation and its end use, they say.

“There’s an old saying among farmers that is, if you can see the barn from your field, you can afford what you put in there,” said Chad Kruger, a consultant working on climate-friendly farming at Washington State University.

There is a limit to how much corn can be converted to fuel without denting the food supply, and that day is not far off, farmers say. Already, corn prices have spiked considerably, causing livestock farmers to complain about costs. Tortilla protesters in Mexico blame the demand for corn by ethanol producers for high prices.

Others say they are concerned that in the rush to convert corn sugar to fuel, lands set aside for wildlife will be freshly plowed, and all the fertilizer and processing waste used along the way will be little help in lowering the temperature of the planet.

Also, at a time when millionaire landowners get six-figure subsidies, there is fear of creating a new class of welfare-farmers hooked on green entitlements.

“So far, the ethanol boom has been positive,” said Chuck Hassebrook, executive director of the Center for Rural Affairs, a nonprofit research group in Nebraska. “But government incentives should be tied to promoting local ownership and producing the crop in a way that is environmentally sustainable.”

The cost of converting something like straw to ethanol is more than twice what it is for corn, which is one big reason no cellulosic plant has yet opened. Still, if market forces and technology come around, the prairie could be dotted with refineries running entirely on grass or field stubble in five to eight years.

And it is that dream that keeps many farmers going: owning their share of the little ethanol plant on the prairie.

“I’ve been hearing about this ethanol for 15 years, and it looks like its time has finally come,” said Cloy Jones, who farms 560 acres here on the Snake River Plateau.

Still, it may not be enough to return rural America to its glory days. Mr. Jones has nine children, all grown. Not one works on the farm.


Copyright 2007 The New York Times Company