Ohio ethanol producers poised for surge on the heels of new biofuels regulation

Greg Badenhop and his father, Glenn, think the future of Ohio's ethanol industry lies in its rural heartland. They are making a high-stakes bet on this assumption by building a filling station on a soon-to-be opened stretch of highway between Toledo and Fort Wayne, Ind., that will feature mainly ethanol fuels.

The Badenhops are among a growing number of Ohio ethanol supporters who feel the alternative fuel has the capacity to grow corn-rich Ohio's economy and reduce our reliance on imported oil, all while helping to keep our environment cleaner too.

Ethanol has been around for quite a while. Unleaded gasoline has contained 10 percent ethanol for years, but debate still rages over whether or not corn ethanol is the biofuel of choice for our nation's future energy needs.

Ohio's ethanol producers are optimistic, however, that the future holds a lot of promise for their industry, especially as new federal mandates require that production be doubled over the next 10 years.

According to Growth Energy, an advocacy for ethanol producers, every billion gallons of ethanol produced in the U.S. creates 10,000 to 20,000 jobs.

"There's no question that the market will grow," says Mark Borer, general manager of the POET Biorefining plant in Leipsic, one of three POET ethanol plants in the state out of five total that are operating. Borer is also president of the Ohio Ethanol Producers Association. "By 2022 we must double our production to 36 billion gallons of biofuels. The majority of that will be ethanol."

Entrepreneurs like the Badenhops are looking to capitalize on what they feel is a willing market in our state by placing filling stations for ethanol in rural areas where there are virtually none now.

"We think you need to take the ethanol to the people who produce it," says Greg Badenhop. "They have more understanding of what they are putting in their vehicles. These farmers want to use it but they don't want to drive to Columbus to get it."

The Badenhops are building a filling station and convenience store on the newly widened State Route 24 that connects Toledo with Fort Wayne. Their venture would offer customers several grades of ethanol, including E20, E30 and E85. They would also sell biodiesel and regular unleaded gasoline. The store would have the look of an old fashioned general store, blending well with the area, says Greg.

"We want to tie into the small town friendly atmosphere," he says. "But our focus is really the alternative fuels. I think the more people understand it, the more they will use it."

The goal would be to eventually franchise the convenience store/filling station model and open more in other rural areas across the state, he says.

Dale Arnold, director of energy policy for the Ohio Farm Bureau Federation, says that the Badenhops may be on the right track.

"The challenge in getting more people to use biofuels has been getting more retail outlets available for ethanol," says Arnold. "We have a lot of flex fuel vehicles out there now. The next step is getting people to actually use those types of fuels," he says.

Up until now, most retailers who offered fuel such as E85 have been located near major metropolitan areas. Rural drivers had little choice but to use unleaded gasoline.

Sam Spofforth, executive director of Clean Fuels Ohio, says that at present there are only about 60 E85 pumps throughout the state.

"Right now a lot of drivers who own flex fuel vehicles don't even have the choice to use E85 because there are no pumps where they live," says Spofforth, who estimates that while roughly four percent of vehicles in Ohio are capable of using E85, less than one percent actually do. "There's a very meaningful impact we can make."

"I do think a lot of the availability of ethanol fuels is skewed toward urban areas," he adds. "People would tend to embrace the choice (in rural areas) if it was offered."

To help increase the number of retailers who offer biofuel choices, Clean Fuels Ohio offers grants to offset some of the cost of installing new pumps, says Spofforth.

Farmers such as Tom Boger of Lyons, a fourth-generation corn grower, says that farmers in the state are certainly aware of how ethanol production can affect them.

"The ethanol industry has definitely helped corn growers," says Boger, who plants about 1,000 acres of corn per year. "It's helped to raise the price of corn."

Boger says that while some critics have argued that farmers will abandon staple food crops to grow corn for ethanol for greater profit, thereby threatening food supplies, he feels that agricultural technology can meet both demands easily.

Increasing crop yields have helped farmers to get the most from every acre of land, and Boger says he expects that yields will go higher still, allowing farmers to grow corn for ethanol while still maintaining crops that meet the world's growing demand for food.

Ethanol may not solve all our nation's energy problems, but it's a step in the right direction that can help our local economy along the way, says Spofforth.

"I think it's a real win-win when you look at the long term," says Spofforth. "It takes the pressure off oil supplies and helps reduce the cost of fuel. I don't think too many people can argue with that."