Ethanol Plant On Track For Port Sutton In '07
DATELINE: TALLAHASSEE
OTHER SITES RUN OUT OF GAS
BY KEVIN BEGOS
The Tampa Tribune
TALLAHASSEE - It's been hailed as a solution to global warming, a savior for family farms and a magic spirit that will wean us from dependency on foreign oil.
But the buzz about ethanol - essentially what country folk used to call moonshine - has shifted to a morning-after phase in Florida: There's still good news and promise, but it's tempered with a shot of reality.
Until recently, groundbreaking for three ethanol plants seemed imminent, but one near Jacksonville was canceled last month and another in Port Manatee is on hold. That leaves the Port Sutton plant from Tampa-based United States EnviroFuels, which may reap a tax-credit windfall for sticking with the project.
"We've got five out of the six major permits" for the plant, U.S. EnviroFuels President Bradley Krohn said. He is hoping to start building in January or February.
Rising construction costs led Gate Petroleum to cancel the North Florida plant, and U.S. EnviroFuels put the Port Manatee plant on hold. Gas prices have fallen since summer. But Krohn thinks the long-term business model for ethanol still looks good.
"If you produce it, you'll have it sold," he said.
Commodity markets suggest he is right, but some question the result for customers - and the environment. The California Energy Commission lists ethanol prices over the last 10 years, and they have risen dramatically, despite rapidly increasing production.
In early 2005, ethanol sold for about $1.35 a gallon wholesale, soared to more than $3.50, and has settled at about $2.20. Add distribution and blending costs, and it's more expensive than gasoline.
Gasoline Produces More Energy
Proponents also don't mention that a gallon of ethanol produces about 25 percent less energy than a gallon of gasoline, said G. David Tilman, an ethanol expert and professor of ecology at the University of Michigan. On top of that, the 51-cent per gallon federal tax credit for "blending" ethanol with gas mostly ends up in the pockets of petroleum refineries.
Tilman agrees that the dawn of the ethanol age is a groundbreaking event, since ethanol has the potential to be a significant nonpetroleum fuel source.
"The dilemma is how much energy we have to put in" to produce it, he said. "If you really look literally, you gain almost no energy" compared with gasoline.
The Plan For Port Sutton Plant
The proposed Tampa plant illustrates that possibility.
The plan is to haul in corn from the Midwest to fuel the facility, and Tilman said that means the total energy "cost" includes the petroleum required to plant and harvest the corn, as well as the energy required to get it to Florida.
But Krohn notes that Florida already has to bring gasoline in from out of state, so he is bringing actual production right to the marketplace.
With the reduction in ethanol plants here, it appears that U.S. EnviroFuels may get a tax credit windfall from the recently passed state energy bill.
The Florida Renewable Energy Technologies & Energy Efficiency Act, heavily promoted by Gov. Jeb Bush, grants up to $6.5 million per year in ethanol plant construction tax credits through 2010.
"It's an incentive for those that move forward quickly," said Mike Sole, deputy secretary of the state's Department of Environmental Protection.
Bill sponsor Sen. Lee Constantine, a Republican from Altamonte Springs, said it was never intended that the tax credits would all be eaten up by one company.
"I think we're going to have more and more" producers over the next few years, he said.
But Holly Binns of the advocacy group Environment Florida said that the title of the so-called "Renewable Energy" bill doesn't tell the full story.
"Our feeling is that overall, this is a bill designed to expedite construction of a whole series of coal-fired power plants," as well as perhaps nuclear ones, she said.
"Fundamentally, this isn't putting Florida on a path to a cleaner and more secure energy future," though the portion of the bill promoting ethanol may be a good idea to help that industry get off the ground, Binns said.
Experimental Process Is Promising
The greatest potential for Florida may come if the kinks are worked out of an alternative process: cellulose ethanol production.
Currently in the experimental stage, it can be fueled by everything from lawn trimmings to tree branches, saw grass and other cheap material that would be easy to grow in Florida.
Krohn, of U.S. EnviroFuels, agreed that's the best long-term plan.
Krohn thinks cellulose ethanol technology is still two to five years away from commercial use, but it may factor in to expansion plans for the Port Sutton site.
Florida Agriculture Commissioner Charles Bronson touts another side benefit to both types of ethanol production.
"There's a two- or threefold issue: saving the agriculture industry and, two, trying to keep as much open space through agriculture without losing it to development," Bronson said this year.
For example, the citrus industry is already struggling from canker-related losses, but other ethanol fuel might be grown with far less trouble.
"And, of course, we need another homegrown fuel source," Bronson said. "We've been relying too long on foreign oil and other fuels. I think that puts us in jeopardy."
Ethanol Buzz Could Die Down
Critics warn that although ethanol has been on a roll with investors, politicians and the general public, that could change.
"Right now ethanol is the closest thing to a state religion in this country," said Jerry Taylor, a senior fellow at the Cato Institute in Washington. "It's a bipartisan conviction."
But Taylor estimated that federal and state alternative fuel tax subsidies are in the $6 billion to $7 billion a year range - about $1 for each gallon of ethanol produced.
"Most people think the ethanol program reduces fuel prices; it doesn't," Taylor said.
But as investment pours into ethanol, Krohn and others expect the technology to improve - in other words, more energy could come from each ton of feed used.
The process based on corn already works, Krohn said, and it's a clean, domestic energy source even if critics question the cost.
"Our vision is to build multiple ethanol plants," he said.
Reporter Kevin Begos can be reached at (850) 222-8382 or kbegos@tampatrib.com.
Graphic by McClatchy-Tribune
Ethanol Refineries in the U.S.
Source: Renewable Fuels Association
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