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Oil companies squeeze ethanol

Shaw says they are using too little

By Janet Kubat Willette

jkubat@agrinews.com

LAKE CRYSTAL, Minn. -- Many people are concerned that ethanol production has overtaken demand.

That's not the case, said Monte Shaw of the Renewable Fuels Association.

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There's not too much ethanol, he said, oil companies are using too little.

The RFS will address that, Shaw said. Government needs to step in because the market isn't working.

Petroleum companies continue to rely on more expensive imported oil rather than cheaper homegrown ethanol.

The RFS would force the petroleum companies to use more ethanol and other renewable fuels and thereby lower costs to consumers, Shaw said.

Sen. Mark Dayton supports an 8-million-gallon RFS, said Gary Wertish, who spoke on behalf of Minnesota's Democratic senator.

Ethanol is helping to make the United States more energy independent, said U.S. Rep. Gil Gutknecht, R-Minn., at Saturday's Northstar Ethanol open house.

Ethanol also costs less to produce per gallon than gasoline.

Ethanol production boosts the price of corn by creating demand. In 2004, Gutknecht said, 12 percent of the U.S. corn crop was processed into ethanol.

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Northstar Ethanol is expected to add seven to 10 cents per bushel to the corn price for area farmers, said Lt. Gov Carol Molnau.

Using renewable fuels will keep agriculture strong, said Sen. Julie Rosen, R-Fairmont, and the Legislature is working hard to promote renewable fuels.

Rep. Bob Gunther, R-Fairmont, reflected on the difficulty of passing Minnesota's 10 percent ethanol mandate 20 years ago.

Now, the governor is signing a bill to increase the state's ethanol mandate to 20 percent.

The 20 percent mandate legislation sent shockwaves around the country, said agriculture commissioner Gene Hugoson.

With Northstar and plants in Atwater and Granite Falls expected to open this summer, Minnesota will have enough instate ethanol production to meet the 20 percent requirement.

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