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Ethanol bill's death in Wisconsin ignores what's happening with our neighbors

In the same week that state senators in Wisconsin killed a bill to require gasoline in the state to include ethanol, policymakers in another Midwestern state were celebrating their latest step toward a more bio-based economy.

Agri-business giant Louis Dreyfus Corp. announced it will build the world's largest biodiesel production plant in northern Indiana, where it plans to crush nearly 50 million bushels of soybeans each year. That will produce more than 80 million gallons of biodiesel and 1 million tons of soybean meal.

Boasted Indiana Gov. Mitch Daniels, whose conservative credentials include working for Presidents Reagan and Bush and running the free market Hudson Institute: "This announcement is the capstone of a tremendously successful year. If you think about what oil did for a state like Texas, biofuels can do that for a state like Indiana."

U.S. Sen. Richard Lugar, an Indiana Republican who has long championed biofuels, also praised the Louis Dreyfus announcement and congratulated the neighboring Illinois State Senate for passing a bill requiring gasoline sold in that state to contain 10 percent ethanol (E-10). A similar bill is awaiting passage in Indiana; Minnesota has already acted.

"We are facing a coming energy crisis because our nation imports 60 percent of our petroleum needs," said Lugar, chairman of the U.S. Senate Foreign Relations Committee. "Governments control more than half of the world's oil reserves. The oil industry does not operate under market forces. Rather, it can be driven by the political agendas of the oil-controlling nations."
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While states such as Indiana, Illinois and Minnesota zoom ahead with bio-based strategies, Wisconsin appears stuck in neutral. Policymakers here appear bent on arguing the details while missing the much larger picture.

The ethanol bill killed for this session in the Wisconsin Senate would have required all regular unleaded gasoline to contain 10 percent ethanol, a fuel additive typically made from corn, by October 2007. The mandate, passed by the Assembly in December, would not have applied to mid-grade and premium gas.

Supporters argued the bill would create thousands of jobs in the ethanol industry, open a new market for farmers and reduce dependence on foreign oil. But the 12 Republicans and five Democrats who voted against it said government should not force consumers to use ethanol or any other fuel. They raised questions about ethanol's potential effect on gas prices, the environment, engines and fuel efficiency.

For example, a study released in September by the state Department of Natural Resources warned the mandate would degrade air quality and increase ozone levels on hot summer days. However, the DNR later said the bill would not require additional regulation of utilities or manufacturers, and environmental groups supported the measure because a provision allowed the DNR to kill the fuel mandate if it harmed air quality.

It's not that problems don't exist with ethanol, but those problems won't be solved if policymakers stand in the way of what now appears inevitable – the emergence of a bio-based economy that will help enhance national security. The Bush administration has set a goal of 25 percent of all available energy in the United States coming from agricultural resources by 2025, and the transition is already underway.

Wisconsin needs to seize opportunities first and worry about the details over time, as technology improves processes and create new products and markets. States that leap ahead with their bio-based economies may encounter bumps in the road, but they're grabbing market share now and engaging private industry as partners. Wisconsin cannot afford to sit idly by while Indiana, Illinois and Minnesota (and, for that matter, Brazil) surge ahead.

Concerns about "letting the market decide" about ethanol are fine in the abstract, but the market has already decided in some very real ways that our economy must disengage from reliance on oil that is largely produced elsewhere. Perhaps the ethanol bill is dead in Wisconsin for now, but there's no avoiding the fact that bio-based fuels and products will become a big part of the state's economic future. The only question is whether policymakers embrace that future or slow it down.

Tom Still is president of the Wisconsin Technology Council. He is the former associate editor of the Wisconsin State Journal in Madison.

The opinions expressed herein or statements made in the above column are solely those of the author, & do not necessarily reflect the views of Wisconsin Technology Network, LLC. (WTN). WTN, LLC accepts no legal liability or responsibility for any claims made or opinions expressed herein.

Comments

PJens responded 8 years ago: #1

Mandating ethanol usage is a bad idea.

My analogy is...How owuld people react if onions were required to be put on every hamburger? Some people do not want onions on their hamburger, and some people get indigestion from onions.

The same is true with ethanol. Not every person wants their gasoline to contain ethanol for a variety of reasons. Moreover, some engines do not run properly on fuel that contains ethanol.

People ought to have a choice which fuel they purchase.

Ethanol and biodiesel ought to be encouraged by investment incentives, not consumption mandates. If they are the answer to future energy needs, let them stand on their own merits. Not proped up by government requirements.

Oh, by the way, Louis Dreyfus Corp is part of Louis Dreyfus Group, a private company based in FRANCE. So much for getting away from reliance on foreign energy and investment:)

A l Duped responded 8 years ago: #2

Ethanol from corn is not the answer. Energy inputs to grow the corn and then process into ethanol are too high. If not for subsidies, ethanol from corn is doomed. Subsidies for mass transit make much more sense. Using precious arable land to grow feedstock for transportation fuels is stupid when we can't feed the world as it is.

Ethanol producers should be forced to rely on their own fuel output to run their operations and should not be allowed to use refined petroleum products.

More serious conservation attempts could be made by promoting fuel efficiency as well. America uses 25% of the world's oil and has 3% of the world's remaining oil reserves. You would think conservation would be a higher priority. America is digging itself deeper by not adjusting to the new realities of oil and its increasing scarcity.

John Biondi responded 8 years ago: #3

Although there isn’t sufficient space here to substantiate these arguments, after having studied the issue I can say unequivocally that ethanol is good for the environment, good for national security, good for the national debt and economy and good for Wisconsin’s economy to include its agriculture, biotechnology, transportation, and construction interests.

Comments that ethanol is not energy efficient are wrong. Only two researchers continue to make that claim out of many who have measured and researched the issue. Policy groups to include the Natural Resources Defense Council, The McKnight Foundation and the Rocky Mountain Institute have dismissed that claim out of hand. The production and distribution economies of ethanol today are more efficient than the production and distribution efficiencies of gasoline. Where gas economies will only get worse as oil has to be extracted from more and more difficult locations, ethanol economies will continue to get better with improvements in technology.

Statements that some engines ‘don’t run properly’ on ethanol miss the mark as well. Whereas a few engines don’t run optimally on low blends of ethanol, none run improperly. Some even run better on ethanol blends and new cars could be optimized for ethanol blends if ethanol blends were the norm.

I think Tom in his remarks hit it on the head concerning free market choices (the forcing onion on the hamburger argument). The oil industry does not operate under free market forces and, given that currently nearly two thirds of our military force and spending is being deployed in or in proximity to oil rich areas, oil is subsidized far more than corn or ethanol could ever hope to be. Oil interests spent over $1 million to defeat the Wisconsin ethanol bill. Although there is no oil production in this state, our legislators sided with the oil interests against the state’s agriculture, biotechnology and other industrial interests which create jobs and wealth here in Wisconsin. I think we should make sure that Wisconsin people have a hamburger before we debate the correctness of mandating the onion.

Our legislatures have spent an enormous amount of time this year on things that don’t improve life for people in Wisconsin to include concealed carry, gay marriage and now the death penalty. A healthy bio-based industry could mean billions for the Wisconsin economy and our legislatures decided to side with big energy against local family farms, state-funded biotech, the construction trades and others. There are at least 17 people in the state Senate that need to wake up.

william lemorande responded 8 years ago: #4

While global warming continues to heat up the planet our Wisconsin legislators are stuck in a fuel that is soon going to be as extinct as dinasours.
What ever happened to the person who could see the forest and not worry about the trees.

John Scott responded 8 years ago: #5

Corn will never ease our dependancy on oil to a substantial amount. We simply do not have enough to do that. If we are to use ethanol, which I personally have no problem doing, we need eliminate gov`t subsidies for it. If ethanol is what every says it is, than it should compete without any gov`t help.

joe de santis responded 6 years ago: #6

I come from Italy where the problem of gasoline is really
felt.We have no reserve of oil and we depend on the Opec
countries.Then Venezuela,for instance,one day says: no more oil for you! We can crush corn and make etanol.Whats wrong with that? You peopl dont see that he UDS is already under
the thumb of thos e who produce oil? What happened to the famous pride of the uS?
Joe de santis

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