Ethanol Production in Minnesota

Travel with Bennett-Watt and learn about ethanol Production in Minnesota.

Bennett-Watt: Minnesota was a leader in renewable fuels, Ethanol and Biodiesel. Before it was fashionable, now they’re at the forefront of what is becoming a national obsession. Gene Hugoson: It started out as an economic development tool for Rome Minnesota. It begins at the time when the farm prices in the 80s. We were looking for ways in which to add value to farm products but it takes so expanded into also a clean air because then suddenly the suburban natural legislators joined in with the rural legislators, a coalition brought this into being and in terms of what could we do to encourage the use of ethanol. So, what we have done here is we created a mandate that said that we had to get to a point where we use 10% of ethanol in all of our gasoline. And then at the same time, we used a device, a means by which ethanol plants could be constructed. And particularly, the farmer own collapse which has been unique for Minnesota in terms of getting their start here. As a result, we’re at the point now where we’re using nearly 20% of our corn crop into ethanol where the largest for capita consumer of renewable fuels in the United States. In Minnesota, there’s a few other states that actually produce more than we do but based on our population, we use more than anyone else. Well, what we’ve seen happened in Minnesota is that we’re getting a lot of ethanol plants to spread out geographically around the state. We’re seeing this being done in such a way that they pay attention to what they’re corn base is or in this case here in near—where it’s also a soybean processing going on for soybeans also. But they look at a kind of a combination of where the product came from and that is the corn and the soybeans. They look for some place that has access to a major realigned. They generally need some natural gas for what’s going on so you want to be near that. You want to have a good highway access. So, it’s really kind of a combination of some of the physical factors as well as in Minnesota where you have a cluster of investors or potential investors that might be going to invest in a particular facility. In Minnesota, we have typically—because we’re so far from all of the ports, farmers have typically built on farm storage for their grain. So, what they will do in the fall when they’re harvesting in October and November is they will dry the corn down. If it’s not dry enough when they’re actually harvesting and then put in some of this metal tall—cans that you might see on the countryside, that green beans. Then what happens is that farmers that are members of ethanol coop have a certain number of—that they’re guaranteed of being able to sell to the ethanol plant and it’s usually done on a schedule so that a farmer is maybe told that during the month of June, he needs to deliver 5,000 which will be upon between such and such of dates. And then during that time, the farmer will be taken the corn out of his bin and bring it into the elevator. But any ethanol plant will not have typically more than maybe a week supply of corn on hand and they’ve been scheduled the delivery from the farmers to keep that supply readily available. We’re actually at the point in Minnesota now where the plants that are just being finished are up to full production will be able to produce a half of billion gallons of ethanol a year here on the state. But just as exciting is that we’ve got plants on the drawing board people that are looking at new plants going through the permitting process in order to be qualified, to be able to build them so that they meet all the environmental standards and so forth that will literally double that production so that we’ll be at a billion or more gallons a year of ethanol production in the state. You couple that with what’s going on in the rest of the country and when the plants nationwide they’re up and running, they will be somewhere between eight and nine billion gallons so one billion out of eight billion for the nation is still a pretty good percentage for that coming out of Minnesota. But certainly what it does demonstrate is that renewable fuels, ethanol is catching on big time all over not only as an economic development incentive for farmers but certainly as really a national energy policy.