State should seize ethanol opportunity
6:16 PM 3/10/02

indentWisconsin industry and government should take advantage of the latest opportunity to build momentum for expanded ethanol production in the state. The U.S. Senate presented that opportunity recently with a tentative agreement that would triple the use of ethanol as a fuel for cars.
indentThe Senate deal was worked out by negotiators for inclusion in a broad energy bill. If passed, the deal would solve a problem in making gasoline comply with the Clean Air Act. It would also offer Wisconsin a chance to profit because it would increase demand for corn, as a raw material for ethanol, and for ethanol production plants.
indentThe Clean Air Act problem the Senate is trying to address arose over a gasoline additive called methyl tertiary butyl ether, or MTBE, now included in about a third of the gasoline sold in the United States. MTBE is added to gasoline to comply with 1990 amendments to the Clean Air Act that require higher oxygen content for gasoline in the nation's most polluted areas.
indentHowever, MTBE has been found to contaminate ground water, and the Environmental Protection Agency has said it might cause cancer.
indentThe Senate's deal calls for the nation to ban MTBE and instead use ethanol to comply with the Clean Air Act. (Most Midwest areas subject to the Clean Air Act, including southeastern Wisconsin, already use ethanol.)
indentEthanol production in Wisconsin has opponents, but their arguments should not prevail. A chief cause of opposition is that some early research showed ethanol requires more energy to produce than it yields. But later research has indicated ethanol does yield more energy than is required to produce it.
indentIn addition, ethanol's promoters have often prompted opposition by exaggerating the fuel's benefits. But exaggerations aside, ethanol does pose advantages as a form of energy because it can be produced from renewable resources, including corn, whey, potatoes and other agricultural products.
indentEthanol also poses opportunities as an industry. That's why Gov. Scott McCallum, in his State of Wisconsin 2001 Energy Policy statement, emphasized ethanol and encouraged the greater availability of E85, a blend of 85 percent ethanol and 15 percent gasoline.
indentWisconsin is home to four ethanol plants now open or under construction: at Plover, near Stevens Point, at Spring Green, 40 miles west of Madison, at Monroe, 40 miles southwest of Madison, and near Gilman, northeast of Chippewa Falls. Plans for other plants in Wisconsin are in the talking stages.
indentA handful of states, including Minnesota and Iowa, are ahead of Wisconsin in ethanol production. Wisconsin government and industrial leaders would be smart to make sure Wisconsin can compete in a growing ethanol industry so that the state can gain a share of the jobs the industry will generate and so that the state's farmers can increase demand for corn and other crops.
indentThat does not necessarily mean the state should throw incentives at the ethanol industry beyond the 20-cents-a-gallon ethanol price subsidy put in place to follow Minnesota's subsidy. But it does mean Wisconsin's tax structure for the industry should remain competitive with those of other states.
indentMore important, Wisconsin should make sure appropriate sites are available for entrepreneurs who want to build ethanol plants. Odor and truck traffic can be siting impediments.
indentEthanol is just one piece in a large energy puzzle. But encouraging ethanol use and production is good energy policy and good economic policy.