Address by Shirley Ball
President of the Ethanol Producers and Consumers

Ethanol Producers and Consumers (EPAC) is a national non-profit association that supports the production and use of ethanol as a clean, renewable resource.

I have been an ethanol advocate for over 20 years, wearing different hats. Now EPAC, focusing on educational, and promotional things.

Promotion and Educating about ethanol is a fun job. It is such a positive issue, with solutions for problems in economics, environment, and energy security. I am also a farmer, have been all my life, and farming has not been so positive last 20 or so years. So, it is nice to be able to focus on the pluses, and to be able to promote an agriculturally based fuel, that has benefits, not only to farmers and agriculture, but also to the consuming public and to taxpayers.

Thanks to RC&D for inviting me to this workshop to talk about ethanol. Today, I want to give a crash course on the basics. You might call it Ethanol 101.

Ethanol 101.The first thing to know is that ethanol is NOT a new fuel. Henry Ford built his first cars to run on ethanol, so it has been around for a long time. The petroleum industry gained a foothold on supplying transportation fuel, and gas and Oil became our standard fuel. But Ethanol has been used in situations, such as during the Second World War.

It was in the 1970s when the OPEC nations put an embargo on oil coming into the US, that ethanol began the climb that has brought it to the position it is in today.

When people hear that I work to promote ethanol they say, "That sounds like a good idea. When do you think that is going to catch on?" Well, it has caught on. Today, 14% to 15% of US motor fuels contains a blend with ethanol. Ethanol is widely marketed across the nation – in the 70s when oil was in short supply, it was used as an extender, now it is used in some places to increase octane – and in other communities it is used to clean up polluted air by decreasing auto emissions. Here in Montana, ethanol blended fuel is sold at about 55 stations. Many of them are in the Northeast and there is a list on the back table.

What is ethanol? It is an alcohol fuel that can be made from grain, or anything that will ferment. The most predominant grain that goes to ethanol is corn, but others, such as wheat, barley, milo and grain sorghum, potatoes also work. Sugar cane and sugarbeet crops, will also work. In Brazil, where they have had a national alcohol fuel program since 1975, they make ethanol mainly from sugar cane. New technology will turn cellulose, trees, switch grass, even garbage into ethanol.

If we in Montana were to make ethanol from the wheat we raise, we could get 2½ gallons of ethanol from each 60 pound bushel of wheat. Corn also gives a return of 2½ gallons of ethanol from each bushel of corn that is used.

Not only will you get 2½ gallons of ethanol from the process, you will also get 20 pounds of high protein distillers grains. This distiller’s grain, or DDG, can be used as a wonderful protein supplement for livestock feed. That DDG contains all the nutrients in the original grain. All the protein, all the germ and vitamins are still there. The distiller’s grains are now down to 1/3 of the original package. We started with a 60 pound bushel of wheat and took all the starch out to become ethanol, and now have 20 pounds of product that contains all of the nutrients.

We import a lot of high protein livestock feed into our state, and we import petroleum products, and we export our grain. How many times do we hear on the farm broadcast stations, "Wheat prices are down due to no overseas markets, or due to overproduction"? And oil prices will rise now that the OPEC nations have met and agreed to cut back on production." And what about "the Reports on Feeder cattle leaving the state."

Processing grain to Ethanol and livestock feed could be the solution to all those depressing newscasts.

When you process the grain, in addition to the ethanol and the DDG, you will also get carbon dioxide that can be used in the food or beverage industry. Not all plants capture that gas, depending on where they are and if they have a market for the product

Back to the basics of ethanol fuel, now we have 2½ gallons of ethanol for each bushel, but what do we do with it. Ethanol is not generally sold as straight ethanol, unless you are a race car driver. When you pull up to a pump and it says ethanol, it also no doubt says, contains 10% ethanol. That is the common blend, It is a blend that is fully warranted by all auto manufacturers. I said that one time and a lady said not in my new car. And I offered to read the owner’s manual with her. Well, turns out her "new" car was only new to her, and it was actually a 70 something model and it did say "Do not use alcohol." Well there are more alcohol fuels than just ethanol, and there have been problems with some of the other alcohol, such as methanol, but the manual did not differentiate between which ones to use and which to not use, but in the 70’s there were not many alcohols around. But, I will extend the offer to you also, and read the manual with you so you can be assured you will be with in the terms of your warranty by using the ethanol blended fuel. Some auto manufacturers recommend the use of ethanol, for reasons of environment, or to reach the motors octane needs.

When you blend 10% of 200 proof ethanol with 90% gasoline, you will increase the octane points by 2½ to 3 points. Straight ethanol is high in octane 111 to 114. That makes ethanol-blended fuel good for the ping you might have been getting from other fuel. Ethanol than is an octane enhancer, and if you remember the big push a few years back to get lead out of gasoline, at that time, ethanol was utilized by some marketers as an octane enhancer.

A side benefit to using ethanol blend is that you will not need to use a gas-line antifreeze in the wintertime. The ethanol in the fuel will pick up the water caused by condensation and carry it out of the system. so think about that as a savings over the cost of buying that little can of HEET.

That 10% blend of ethanol also does good things for the environment. Ethanol contains oxygen, in fact, 35% oxygen, making it an environmentally friendly alternative to fossil fuels. As an oxygenated fuel, it causes a more complete combustion of gasoline, resulting in fewer emissions. The use of ethanol reduces carbon monoxide emissions by as much as 25%. It also reduces other pollutants.

The Clean Air Act that was passed in 1990 allowed the EPA to require certain communities in the nation that had CO pollution to use oxygenated fuel to clean up that pollution. Missoula is one of those communities. They started their program using another oxygenate, MTBE, methyl tertiary butyl ether, and noticed health problems in people who were subjected to auto emissions, such as drive in banks, etc. A public committee was appointed by the city county health Board, and they determined that they still needed and wanted to clean up the air, but not with MTBE. They decided that not enough testing had been done to prove MTBE was a safe fuel, so switched instead to ethanol, and have been happy with the program. Anchorage, Alaska also started out in the program using the MTBE, and switched to ethanol blended fuel.

Too bad that other communities did not take a lesson from Missoula and Anchorage, as now, in other places, California especially, they are seeing the problems associated with MTBE. It has been in the news a lot lately, I’m sure you have read about it. At least nine states have passed laws that ban MTBE, and many more are looking at doing the same. This ban is creating a huge market for ethanol

The question of course is being raised, can the ethanol industry meet that demand? And the industry has answered with a rousing yes. As of January 2001, there were 62 ethanol plants in the nation either up and running or under construction. Those 62 plants will produce 2006 Million gallons of ethanol. I have a chart in a manual I have along. Since January of 2001, I know of another 8 or 9 plants that have had groundbreaking and started construction. Most are in the Midwest, South Dakota and North Dakota and some are associated with a plant that is up and running. According to the renewable fuels association in Washington DC, the industry has set record production each month for the past nine months, and still growing. Fantastic response to a need.

Financing has become more easily available to build plants. In part because of the market demand, in part because of the high price of oil and truthfully, the low price of grain. Ethanol price follows oil price, and the plants are showing better margins, so it is easier to show lenders that there is a strong bottom line. And, the terrible tragedy caused by terrorists has increased the public awareness that our nation has gone down the wrong road, by becoming dependent on foreign oil. Transportation fuel is a necessity, we need it, and if we do not have in here, we have to get it some where. And pay for it. Paying foreign countries for oil has helped to finance the wrong leaders. Too much of the money we pay for foreign oil is being used against us.

How much better we got at least some of our transportation fuel from our farms and as a nation supported our agricultural communities with ethanol plants.

In addition to supporting our own countrymen, we could be using a fuel that is renewable!!!! You know, the good lord willing, year in and year out, we could have the feedstock available, instead of using a product that will in time be depleted.

Minnesota heard this message, and I consider that state a leader bringing about the use and production of ethanol. Ethanol blend was first introduced into the twin cities, and about that time The state Department of Agriculture began massive educational program about ethanol. Putting up displays, speaking at meetings, putting in a toll free line for asking questions. And a few years later, the state legislature passed a law that said all fuel sold in the state had to include a blend of ethanol. They had to fight the oil companies, but the law passed, and if you drive through Minnesota and fuel up, ethanol blended fuel is what you will get. But the other thing that Minnesota got was 15 new business. Ethanol plants. Many of them farmer-owned plants. Can you imagine what 15 new agricultural processing businesses would do for Montana?

Most of the plants are 17 to 20 million gallons a year, although Minnesota Corn Processors is much larger, and one that processes cheese whey into ethanol is much smaller. I have visited with some of the farmers who are partners in the coops, and they are excited about their hometowns. There is industry, there are jobs. And there are spin-off jobs. The dollars are turning over and bringing some economic help to those communities. What an example!

Are you wondering, if I believe that strongly, why not build an ethanol plant? And you know, I tried that too. In 1980, after many months of work, we, a group of seven farm families in Valley County had a USDA government-guaranteed loan approved for the purpose of building a small ethanol plant. And in January 1981, when President Reagan came into office, it, along with a number of other loans was rescinded. In fact, any program on alternative fuels did not fare very well during the Reagan Presidency.

Just a bit more about E10, also known as gasohol. Our station in Nashua has carried the fuel for 20 or so years, so I can always get the 10% blend. We use it in all of our gasoline-powered equipment, tractors, trucks, backhoe, swather, lawn mower, and chainsaw. Everything.

And I want to touch just a minute on another ethanol fuel blend. E85 is a blend of 85% ethanol and 15% gasoline, and is considered an alternative fuel. The E10 is not considered an alternative under the Energy Policy Act. And the Energy Policy Act requires certain fleets to phase into using alternative fuels and alternative fuel vehicles.

I drove here in an AFV, a 2001 Ford Taurus, built at the factory to run on E85 fuel. It is a flexible-fueled vehicle, so when I can not get the E85, I can run it on straight gas, or any blend up to the 85%. This is the fourth car EPAC has had that runs on E85, and we have never had a problem. The MW&BC helps to finance the car. The only station in Montana is in Helena, at malfunction junction where they sell both the E85 and the e10 blends. There is a station going in West Yellowstone, and there is a station in the Park. The Park has a number of E85 vehicles and like the fuel. Park has been a huge supporter of biofuels. both the ethanol blends and the biodiesel. I also keep a barrel of denatured ethanol on the farm, and I put that in the car when I leave home, so can drive on the higher blend.

In cities and states, especially where there are more people and more pollution, you will see a number of the E-85 stations. In regards to vehicles, there are thousands and thousands of them on the roads. Not only the Taurus, but also the Ranger, the Chrysler mini-van, Dodge caravan and others. If you are with a company or agency that is to meet the fleet requirement in the Energy Policy, I hope you will look first at E85. It is a fuel that dispensed at a pump like we are used to using. It is not harmful if spilled on your hands. It does not require specialized equipment. Mike Allen, one of EPAC’s Board members has a paper that will make it easy to put in.

I hope the RC&Ds will move forward to help bring ethanol production to the state. EPAC is willing to work with you. EPAC is a non-profit group, with members in over 25 states, and a13 person elected Board of Directors. Jim Glancey is one of our Directors. TIM: By way of educational projects, we publish a newsletter, some on back table. Have annual conferences. The next one will be June, 9 -11, the 11th annual Montana Ethanol Conference in Whitefish. 

We do national projects too, and recently contracted with DOE and the RBEP program to conduct ethanol workshop for rural America. The next is to be held in North Carolina on December 12, and recently conducted ethanol workshops in Pennsylvania.

I would like to thank you Jeff James for helping to sponsor this program today. The RBEP program has been a great way to get information to the public about alternative fuels. I am going to break from an ethanol 101 speech to tell the audience that the RBEP program is in danger of losing it’s funding, and so I am going to ask the audience, if you have any clout with the DC guys, ask them to continue the RBEP, as this is one of the main ways that news about alternatives gets to the public.

I will close with this, if you think ethanol is the way to go, you can help the cause. You do not have to build a plant, or grow the crop. When you go to your favorite service station, ASK for it. Tell them, if they do not want to bring it in, you will go to a station that does. Good luck, and thank you.