NEWS

Ethanol manufacturers say biofuel is helping keep gas costs down

Kevin Sampier

Record gasoline prices of more than $4 a gallon would be even higher without adding ethanol to the mix, according to local manufacturers of the corn-based fuel source.

But a growing number of critics say ethanol won’t solve the country’s energy crisis.

"I don’t think anybody predicted that we’d see $130 (per barrel) oil," said Ron Miller, CEO of Pekin’s Aventine Renewable Energy, which produces about 157 million gallons of ethanol each year.

Miller said studies from several economists indicate the price at the pump would be between 40 cents and $1 more per gallon if it wasn’t for the 10 percent blend of ethanol added to most fuels in the state.

"As bad as it is, it would be at least a $1 a gallon worse without ethanol," Miller said.

That’s because it takes two barrels of oil to create one barrel of refined gasoline, while one barrel of ethanol still equals one barrel of ethanol, Miller said.

"If you take low-cost molecules out of a system, you’re going to have to replace them with something else," he said, and that something is likely more foreign oil.

Despite ethanol’s lower wholesale cost per gallon (about $2.50) compared to gasoline (about $3.40), it currently isn’t selling as well as one might think.

There is a large supply of ethanol for sale on the market, but oil companies aren’t buying the fuel very rapidly.

"You have lots of sellers, but few buyers," Miller said, adding the ethanol industry as a whole is much more fragmented than large oil companies.

These issues combined are causing many ethanol manufacturers to sell their product for less than it’s worth.

Miller said the ethanol market should rebound in 2009, when demand is expected to catch up with supply, and that could mean a new ethanol plant for Pekin.

Plans for a third plant at the Aventine facility have been temporarily put on hold but a final decision could be made by next year.

"That project is still on our drawing boards," Miller said. "I’m not giving up on it by any means."

But critics of the ethanol industry say the problems with the fuel go much deeper and say it is an impractical energy source.

"Just inflating tires properly in cars would be much bigger savings than all ethanol produced in the United States," said Tad W. Patzek, professor and chemical engineer at the University of California, Berkeley.

Patzek has written numerous articles and books speaking out against ethanol and has addressed transportation ministers of the European Union and representatives of the U.S. State Department on the subject.

"We are running in a certain direction while we should possibly be running in the opposite direction," Patzek told the Journal Star on Tuesday.

The answer, Patzek said, is using less fuel, creating more modes of public transportation and conserving energy.

"Use less fuel. Period. That’s where the discussion should go, but it’s not going there," he said.

Miller said he agrees with Patzek in that Americans should try to conserve more, but said biofuels definitely have a place at the discussion table.

"In some respects, they’ve got their own oil fields here in Illinois," Miller said. "They’re just called corn fields."

Kevin Sampier can be reached at (309) 346-5300 or ksampier@pjstar.com.