By Sean Mussenden
Media General News Service
Media General News Service
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WASHINGTON -- The biofuel boom that pumped new life into the Midwestern economy is migrating south, carrying with it an optimism not seen in rural farm towns in decades.
The first wave of ethanol production started in states like Iowa, with plants adjacent to unending fields of corn used to make the alternative fuel.
Today, only a handful of small ethanol plants call the South home, but that's about to change.
About a dozen are expected to come online in Alabama, Georgia, North Carolina, Florida and Tennessee beginning later this year.
As in Iowa, many of the first crop of ethanol producers coming to the South will rely on corn.
Demand for the starchy kernels is transforming farms in almost every Southern state, even before the first corn-fed refinery opens in the region. Farmers planted records amounts of corn this year, encouraged by prices swelled by demand for ethanol.
Most Southern states use more corn than they produce, mostly to feed pigs and chickens. For that reason, biofuel experts doubt that corn will remain the top ethanol crop for very long.
"Growing corn is not what we do best. So there's not much logic - in the long term - in putting an ethanol plant in North Carolina - or many states in the South - that depend on corn," said Steven Burke, chairman of the Biofuels Center of North Carolina, a non-profit group working to bring the industry to the state.
Philip Kohl sees plenty of logic in a corn-based plant, even if it means bringing much of his feedstock in by rail from the Midwest.
His company, Clean Burn Fuels, is building a facility in Raeford, N.C., near Fort Bragg. The $100 million facility is set to open in 2009 and will be financed in part with loan guarantees from the U.S. Dept. of Agriculture.
"Everyone thinks it's harder to make a profit when you have to bring in corn in from somewhere else. That's why all the plants are in the Midwest. But those economics are changing dramatically," he argued.
His company is building a "destination plant" next to a rail line that will bring in corn. Demand for ethanol in large East Coast driving markets is expected to increase over the next few years. Kohl compared the cost of bringing in finished ethanol with the cost of bringing in corn and processing it locally, and decided he could make money.
He hopes eventually to build other facilities adjacent to his corn plant to make cellulosic ethanol.
Unlike ethanol made from grain, cellulosic uses the stalks or pulpy parts of plants. Scientists and investors are looking at everything from switchgrass to pine trees.
"The Midwest may be the corn belt, but we're the biomass belt," said Jill Stuckey, director of alternative fuels for the state of Georgia, noting the ample pine forests in the state.
Other corn plants are planned for Alabama, Georgia and Tennessee. The investors behind those projects believe they will be profitable.
In Madison County, Ala., farmer Dennis Bragg planted three times as much cotton as corn last year. This year, he planted three times more corn than cotton, in response to rising prices caused by demand for ethanol.
Bragg is part of a group of farmers and investors building an ethanol plant near his northern Alabama farm. Like Kohl's North Carolina plant, it will be a destination plant, drawing corn supplies from several states.
"Whether you're bringing ethanol from Nebraska to Atlanta or corn from Nebraska to Atlanta, you'll still pay transit, so it works out," he said.
MOVING PAST CORN
Many working in the alternative energy industry in the South are already looking past corn.
"We see corn as a transition technology. That may be heresy to say in the Midwest, but in the Southeast, that's the way things look to us," said Richard Wilson, executive vice president of Xethanol.
The alternative energy firm is based in New York, but will move its headquarters to Atlanta soon. Why? Look at a satellite map of the country, Wilson said. "The Southeast is nothing but green. That's where all the biomass is."
His company recently bought an old fiberboard factory in Spring Hope, N.C., and a former pharmaceutical plant in Augusta, Ga. They are negotiating a lease to build a plant in Auburndale, Fla.
The company has not settled on what crop to use at the plants, but are considering pine trees and the parts of oranges and grapefruits left over after extracting juice.
One problem: the technology to make large amounts of cellulosic ethanol does not yet exist.
In South Carolina, Nicholas Rigas, chairman of the South Carolina Biomass Council, is planning to begin construction next summer on a cellulosic ethanol pilot plant near Charleston.
"The technology works in the lab," he said. "The challenge is scaling it up for full-scale production."
Making ethanol from corn is relatively simple by comparison. Corn is easy to break down, whether in our stomachs, as food, or in an ethanol refinery.
Millions of years of evolution have had the opposite effect on rigid plant stalks and wood, which were designed to keep plants sturdy and upright, said Emmanuel Petiot, global business development manager for Novozymes, a manufacturer of enzymes used in ethanol production. Their U.S. headquarters is in Franklinton, N.C.
He predicted that the first commercially operational cellulosic plant is still three to four years away.
"There's a lot of hype out there when it comes to cellulosic," he said.
FUEL FROM TRASH
Davis Cosey distributes oil and runs gas stations in Perry, Ga. He started looking into alternate fuels five years ago, after realizing that nearby Robins Air Force Base would buy it if he could supply it.
He obtained ethanol from a small plant in Southwest Georgia, Wind Gap Farms, which produces the fuel from brewery waste. By the end of the year, he will produce his own at a plant under construction in Cordele, Ga.
His plant will sit next to a plastics recycling facility, which will supply Cosey with leftover soda and expired juice he can turn into ethanol.
"If there's sugar in it, that's fuel," Cosey said. "The other day, a guy from Florida called to tell us he had a few trucks of pineapple juice concentrate that had gone bad. He was going to throw it away."
Cosey's plant will be small compared to the behemoths in Iowa. Some churn out more than 100 million gallons a year. Cosey expects to produce about five million gallons next year.
"There's only a finite amount of waste product. So it's not the full answer by any means. But we think it will help lessen our dependence on foreign oil," he said.
The question remains: once these new plants produce ethanol, how will it get to the gas pump?
Some of Cosey's gas stations sell E85 ethanol, a blend of 85 percent ethanol and 15 percent gasoline. But his are some of the only ones in Georgia that sell the alternative fuel.
Unless something changes, drivers will have a hard time filling their tanks with ethanol, said Matt Hartwig, a spokesman for the Renewable Fuels Association, an industry group.
"The ethanol industry doesn't deliver it to the pump. The oil companies (who blend it with petroleum) do that," he said. "And they have shown some grudging acceptance of ethanol."
The first wave of ethanol production started in states like Iowa, with plants adjacent to unending fields of corn used to make the alternative fuel.
Today, only a handful of small ethanol plants call the South home, but that's about to change.
About a dozen are expected to come online in Alabama, Georgia, North Carolina, Florida and Tennessee beginning later this year.
As in Iowa, many of the first crop of ethanol producers coming to the South will rely on corn.
Demand for the starchy kernels is transforming farms in almost every Southern state, even before the first corn-fed refinery opens in the region. Farmers planted records amounts of corn this year, encouraged by prices swelled by demand for ethanol.
Most Southern states use more corn than they produce, mostly to feed pigs and chickens. For that reason, biofuel experts doubt that corn will remain the top ethanol crop for very long.
"Growing corn is not what we do best. So there's not much logic - in the long term - in putting an ethanol plant in North Carolina - or many states in the South - that depend on corn," said Steven Burke, chairman of the Biofuels Center of North Carolina, a non-profit group working to bring the industry to the state.
Philip Kohl sees plenty of logic in a corn-based plant, even if it means bringing much of his feedstock in by rail from the Midwest.
His company, Clean Burn Fuels, is building a facility in Raeford, N.C., near Fort Bragg. The $100 million facility is set to open in 2009 and will be financed in part with loan guarantees from the U.S. Dept. of Agriculture.
"Everyone thinks it's harder to make a profit when you have to bring in corn in from somewhere else. That's why all the plants are in the Midwest. But those economics are changing dramatically," he argued.
His company is building a "destination plant" next to a rail line that will bring in corn. Demand for ethanol in large East Coast driving markets is expected to increase over the next few years. Kohl compared the cost of bringing in finished ethanol with the cost of bringing in corn and processing it locally, and decided he could make money.
He hopes eventually to build other facilities adjacent to his corn plant to make cellulosic ethanol.
Unlike ethanol made from grain, cellulosic uses the stalks or pulpy parts of plants. Scientists and investors are looking at everything from switchgrass to pine trees.
"The Midwest may be the corn belt, but we're the biomass belt," said Jill Stuckey, director of alternative fuels for the state of Georgia, noting the ample pine forests in the state.
Other corn plants are planned for Alabama, Georgia and Tennessee. The investors behind those projects believe they will be profitable.
In Madison County, Ala., farmer Dennis Bragg planted three times as much cotton as corn last year. This year, he planted three times more corn than cotton, in response to rising prices caused by demand for ethanol.
Bragg is part of a group of farmers and investors building an ethanol plant near his northern Alabama farm. Like Kohl's North Carolina plant, it will be a destination plant, drawing corn supplies from several states.
"Whether you're bringing ethanol from Nebraska to Atlanta or corn from Nebraska to Atlanta, you'll still pay transit, so it works out," he said.
MOVING PAST CORN
Many working in the alternative energy industry in the South are already looking past corn.
"We see corn as a transition technology. That may be heresy to say in the Midwest, but in the Southeast, that's the way things look to us," said Richard Wilson, executive vice president of Xethanol.
The alternative energy firm is based in New York, but will move its headquarters to Atlanta soon. Why? Look at a satellite map of the country, Wilson said. "The Southeast is nothing but green. That's where all the biomass is."
His company recently bought an old fiberboard factory in Spring Hope, N.C., and a former pharmaceutical plant in Augusta, Ga. They are negotiating a lease to build a plant in Auburndale, Fla.
The company has not settled on what crop to use at the plants, but are considering pine trees and the parts of oranges and grapefruits left over after extracting juice.
One problem: the technology to make large amounts of cellulosic ethanol does not yet exist.
In South Carolina, Nicholas Rigas, chairman of the South Carolina Biomass Council, is planning to begin construction next summer on a cellulosic ethanol pilot plant near Charleston.
"The technology works in the lab," he said. "The challenge is scaling it up for full-scale production."
Making ethanol from corn is relatively simple by comparison. Corn is easy to break down, whether in our stomachs, as food, or in an ethanol refinery.
Millions of years of evolution have had the opposite effect on rigid plant stalks and wood, which were designed to keep plants sturdy and upright, said Emmanuel Petiot, global business development manager for Novozymes, a manufacturer of enzymes used in ethanol production. Their U.S. headquarters is in Franklinton, N.C.
He predicted that the first commercially operational cellulosic plant is still three to four years away.
"There's a lot of hype out there when it comes to cellulosic," he said.
FUEL FROM TRASH
Davis Cosey distributes oil and runs gas stations in Perry, Ga. He started looking into alternate fuels five years ago, after realizing that nearby Robins Air Force Base would buy it if he could supply it.
He obtained ethanol from a small plant in Southwest Georgia, Wind Gap Farms, which produces the fuel from brewery waste. By the end of the year, he will produce his own at a plant under construction in Cordele, Ga.
His plant will sit next to a plastics recycling facility, which will supply Cosey with leftover soda and expired juice he can turn into ethanol.
"If there's sugar in it, that's fuel," Cosey said. "The other day, a guy from Florida called to tell us he had a few trucks of pineapple juice concentrate that had gone bad. He was going to throw it away."
Cosey's plant will be small compared to the behemoths in Iowa. Some churn out more than 100 million gallons a year. Cosey expects to produce about five million gallons next year.
"There's only a finite amount of waste product. So it's not the full answer by any means. But we think it will help lessen our dependence on foreign oil," he said.
The question remains: once these new plants produce ethanol, how will it get to the gas pump?
Some of Cosey's gas stations sell E85 ethanol, a blend of 85 percent ethanol and 15 percent gasoline. But his are some of the only ones in Georgia that sell the alternative fuel.
Unless something changes, drivers will have a hard time filling their tanks with ethanol, said Matt Hartwig, a spokesman for the Renewable Fuels Association, an industry group.
"The ethanol industry doesn't deliver it to the pump. The oil companies (who blend it with petroleum) do that," he said. "And they have shown some grudging acceptance of ethanol."